Dani Rodrik has a good post about corruption and how it applies to developing countries.
Developing countries seem to have obstacles in every possible sector that stand in the way of further growth. Despite the numerous problems they face, many people (economists, but the general population as well) focus on only a few issues, such as health, education, lack of free markets, and especially poor/corrupt governments. To focus solely on one issue, or even only 2 or 3 of these issues, misses the big picture. Development can't be pursued one sector at a time. It is trying to build a house of cards vertically instead of horizontally. When your building it, you lay down one level, then you slowly move up one level when the foundation is secure and complete. If you tried to build off a weak or incomplete foundation, the whole house will likely fall.