The empirical evidence on the strong Development Dividend of Good Governance is clear. Similar improvements could take place when civil liberties and voice improve from low levels to middle levels. Voice, accountability and civil liberties including freedom of the press are also found to impact positively on reduced corruption and on incomes per capita. The performance of aid-financed investment projects is significantly and positively related to the extent of participation and civil liberties in the country. If a country were to improve civil liberties from the worst to the best, the economic rate of return of projects would increase by at least 7.5 percentage points, and possibly by three times as much.
Corruption poses a heavy burden disproportionately on the poor.
Poor households in many countries like Ecuador spend three times more in bribes as a share of their incomes than higher income households for access to public services. Studies on Paraguay and Bolivia show that corruption and absence of meritocracy in public agencies impair access to services by the poor. Similar improvements in these development outcomes are associated with more corruption control from the levels of Korea, Czech Republic or Poland to higher levels of Denmark, Singapore, Finland or Norway. Indeed, better governance goes with much improved development outcomes. For example, an improvement in the rule of law from the levels corresponding to countries like Tajikistan or Liberia to that of Mongolia, Latvia or Tanzania is associated with improved development outcomes in the long term and with significant reductions in infant mortality.