Is corruption an efficient grease? A cross-country aggregate analysis Pierre-Guillaume Méon 1* , Laurent Weill 2 1 University of Brussels, DULBEA, CP-140, avenue F.D. Roosevelt 50, 1050 Bruxelles, Belgium. (e-mail: pgmeon@ulb.ac.be) 2 Université Robert Schuman, Institut d’Etudes Politiques, 47 avenue de la Forêt Noire, 67082 Strasbourg Cedex, France. (e-mail: laurent.weill@iep.u-strasbg.fr) Abstract: This paper tests whether corruption can be viewed as some efficient grease in the wheels of otherwise deficient institutional frameworks. It does so by analysing the interaction between aggregate efficiency, corruption, and other dimensions of governance on a panel of 62 countries both developed and developing. Using three measures of corruption and five measures of other aspects of governance, we repeatedly observe that corruption is always detrimental in countries whose institutions are efficient, but that it may be positively associated with efficiency in countries whose institutions are ineffective. We thus find evidence of the grease the wheels hypothesis. Keywords: governance, corruption, income, aggregate productivity, efficiency. JEL Classification: C33, K4, O11, O47. * Corresponding author.