This dissertation consists of three essays. The topics cover determination, variance and repercussions of corruption (essay one), corruption deterrence through wage incentives (essay two), and natural resource curse (essay three). In the first essay, I show that for a larger population of unskilled labor, there is a widespread corruption and for a smaller population there is no corruption. For the intermediate levels there are multiple equilibria. On its consequences, corruption increases wage inequality between skilled and unskilled workers, and results in output and welfare losses. In the second essay, I argue that deterring corruption through efficiency wage may become prohibitively expensive. With endogenous monitoring technology that allows capturing the dual role of auditing, as a complement with and as a substitute for wage incentives, I find that the government is better-off accepting corruption when it is costly to monitor. When it is optimal to deter bribery, the government can do it either through efficiency wages or monitoring. The role of efficiency wages decreases in societies with higher level of dishonesty. In the third essay, I build a theory explaining a resource curse. In contrast to the existing literature which generally considers low education, corruption and natural resources separately, I combine three strands of literature. Natural resources affect incentives to invest in education and rent seeking that in turn affects growth. Second, the relationship between resource-abundance and resource-curse is non-monotonic. For low inequality in access to education and high cost of political participation, high-growth and poverty-trap equilibria co-exist.