Exploiting the Poor: Bureaucratic Corruption and Poverty in Africa

Justesen, Mogens Kamp; Bjørnskov, Christian

doi:10.2139/ssrn.2168119

Cited by 15 publications

(14 citation statements)

References 61 publications

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“…They again maintained that about two-thirds of drugs meant for free public distribution were stolen and unaccounted for by public officials which affects access to and the quality of healthcare provided to the general public. Similar results have been found in the educational system across 18 African countries (Justesen and Bjørnskov, 2014). The effect of corruption on growth is reflected in the reduced level of human capital as access to public goods such as education and healthcare is limited (Reinikka and Svensson, 2004).…”

Section: Corruption-economic Growth Nexus What Does the Theory Say?:supporting

confidence: 73%

Greasing or sanding the wheels? Effect of corruption on economic growth in sub-Saharan Africa

Ibrahim

Kumi

Yeboah

2015

AJESD

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Corruption is a pervasive challenge confronting the world more especially countries in sub-Saharan Africa. This paper investigates the effect of corruption on economic growth in the subregion using data spanning 1998 to 2011. By employing the pooled estimated generalized least squares (EGLS) and two stage least squares (2SLS), we find that corruption is inimical to economic growth through its indirect effect on gross fixed capital formation and labour force. The results are not only robust to controlling for endogeneity using regional blocs of the countries as instruments in the 2SLS estimations but identifies government expenditure as additional pass-through effect of corruption to growth. Our findings suggest that for countries within the sub-region to achieve sustained economic growth, control of corruption must take precedence over the design and implementation of any macroeconomic policy. Campaign against corruption does not only improve on institutional quality but is by far growth-enhancing.

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Section: Corruption-economic Growth Nexus What Does the Theory Say?:supporting

confidence: 73%

Greasing or sanding the wheels? Effect of corruption on economic growth in sub-Saharan Africa

Ibrahim

Kumi

Yeboah

2015

AJESD

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“…In particular, corruption has been shown to been detrimental to growth (Mo, 2001;Tanzi and Davoodi, 2002), foreign direct investment (Wei, 2000;Abed and Davoodi, 2002), productivity (Lambsdorff, 2003), inflation (Al-Marhubi, 2000), confining the shadow economy (Friedman et al, 2000;Schneider et al, 2010), government bond ratings (Depken and Lafountain, 2006), government expenses on 1 Corruption is defined as the abuse of public power for private gains (Buehn and Schneider, 2009). (Mauro, 1998), and the economic status of the poor (Justesen and Bjornskov, 2014).…”

Section: Introductionmentioning

confidence: 99%

New evidence on corruption and government debt from a global country panel

Apergis

2019

JES

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Purpose The purpose of this paper is to explore the link between corruption and government debt through a regime-based approach. Design/methodology/approach The empirical analysis makes use of a panel of 120 countries, spanning the period 1999–2015. The study makes use of the Panel Smooth Transition Regression (PSTR) methodological approach, as well as two alternative measures of corruption. Findings The empirical results document that the relationship between corruption and debt is non-linear, while a strong threshold effect was present as well. Public debt appears to respond faster to a high corruption regime compared to a low corruption regime, while an increase in the size of the shadow economy, government expenses, the inflation rate, interest payments on debt and military expenditure all increased the debt to GDP ratio. By contrast, an increase in GDP per capita, the secondary school enrollment ratio and the ratio of tax revenues to GDP led to a fall in the debt to GDP ratio. The findings survive certain robust checks when the role of the 2008 financial crisis is explicitly considered, as well as when two separate country samples were considered, i.e. developed vs developing countries. Practical implications Governments should aim to control both corruption and the size of the shadow economy if they really wish to reduce any high levels of their public debt. As debt levels respond faster to high corruption regimes, it is necessary that measures to reduce corruption are complemented by higher GDP per capita growth rates, enrolment rates and higher tax revenues. Originality/value The novelty of the paper is that it investigates for the first time, to the best of the authors’ knowledge, the presence of non-linearity between corruption and government debt. It proposes non-linear panel cointegration and causality tests, as well as a non-linear panel error correction model that allows for smooth changes between regimes, hence, examining causal relationships in each regime separately.

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“…11. The poverty index is based on the work of Bratton et al (2005) and measures poverty as respondents' experience with lack of access to five basic types of household necessities: food, water, medicine, fuel to cook food, and cash income (Justesen and Bjørnskov 2014). The index comprises the sum of these five survey items.…”

Section: Resultsmentioning

confidence: 99%

Economic Shocks and Subjective Well-Being: Evidence from a Quasi-Experiment

2013

Self Cite

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This paper examines how economic shocks affect individual well-being in developing countries. Using the case of a sudden and unanticipated currency devaluation in Botswana as a quasi-experiment, we examine how this monetary shock affects individuals' evaluations of well-being. We do so by using micro-level survey data, which -incidentally -was collected in the days surrounding the devaluation. The chance occurrence of the devaluation during the time of the survey enables us to use pre-treatment respondents, surveyed before the devaluation, as approximate counterfactuals for post-treatment respondents, surveyed after the devaluation. Our estimates show that the devaluation had a large and significantly negative effect on individuals' evaluations of subjective well-being. These results suggest that macroeconomic shocks, such as unanticipated currency devaluations, may have significant short-term costs in the form of reductions in people's sense of well-being.3

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Exploiting the Poor: Bureaucratic Corruption and Poverty in Africa

Cited by 15 publications

References 61 publications

Greasing or sanding the wheels? Effect of corruption on economic growth in sub-Saharan Africa

Greasing or sanding the wheels? Effect of corruption on economic growth in sub-Saharan Africa

New evidence on corruption and government debt from a global country panel

Economic Shocks and Subjective Well-Being: Evidence from a Quasi-Experiment

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