This research has examined effects of corruption on economic growth in the broad sample of countries from 1996 to 2006. Financial corruption usually defined as an abuse of public authority to gain personal interests. Economics theoretical literature presents a dual view about relation between corruption and economic growth. Tthe first branch the economic theory claims that corruption can increas economic growth (particularly in less developed countries) through overcoming rigid and inefficient laws and regulations imposed by government. On the other hand some theories argue that corruption decreases economic growth by harming the suitable performance of markets. This paper has examined the effects of financial corruption on the economic growth in three groups including low income countries, middle income countries and high income countries. To estimate our econometric model we have used panel data technique and to measure the amount of corruption we have used control of corruption index prepared by World Bank institute. Although in the middle and high income countries, control of corruption has a positive and significant effect on economic growth, in the low income countries this relation is negative and strongly significant.
)
