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

Ibrahim, Muazu; Kumi, Emmanuel; Yeboah, Thomas

doi:10.1504/ajesd.2015.069858

Cited by 17 publications

(10 citation statements)

References 55 publications

(56 reference statements)

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“…Thus, it is expected that political stability and absence of violence positively impact financial development. Consistent with Naved and Shahid (2010), Ibrahim, Kumi, and Yeboah (2015) and Jahanzeb and Aziz (2017), a low level of corruption promotes private investment that in turn enhances financial development. Therefore, it is predicted that corruption control positively affects financial development.…”

Section: Datasupporting

confidence: 61%

Governance and financial development: Evidence from a global sample of 120 countries

Ondoa

Seabrook²

2020

Int. J Fin Econ

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This study empirically investigates the impact of governance quality on financial development. The study employs a Dynamic Common Correlated Mean group technique using data from a global sample of 120 countries, among which 32 high‐ and 88 low‐income countries, for the period 2002–2017 to examine this linkage. Political stability and absence of violence, rule of law, control of corruption, regulatory quality, government effectiveness, and voice and accountability are used as proxies for governance quality, whereas financial institutions depth and credit to private sector are proxies of financial development. The following findings have been established. Regulatory quality and political stability and absence of violence are positively associated with financial development, whereas voice and accountability, and government effectiveness are negatively associated with it. Moreover, the degree of the impact of these governance indicators on financial development is relatively greater in high‐income countries as compared to low‐income countries. On the basis of these results, governments in high‐ and low‐income countries must implement the following policies in order to improve the development of their financial systems: Firstly, they should promote a better regulation quality by implementing sound policies and regulations that permit and improve private sector development. Secondly, they should maintain a stable political environment by allowing people to enjoy, but not excessively, their rights and freedoms under the constitution. Policy makers should lastly moderate their commitment towards certain public policies, such as imposition of high tax rate to the private sector.

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Section: Datasupporting

confidence: 61%

Governance and financial development: Evidence from a global sample of 120 countries

Ondoa

Seabrook²

2020

Int. J Fin Econ

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“…Therefore, and as likewise observed by Chuah et al (2020, p. 1), “the notion that corruption ‘greases the wheels’ of [an] economy is misguided”. Moreover, that view has been debunked by scholars and practitioners researching corruption issues and providing solid evidence of corruption’s destructive consequences on sustainable development in Africa, and also pointing to the imperative that corruption and bribery be significantly curtailed (Ayittey, 2018; Hope, 2017a; Ibrahim et al , 2015).…”

Section: The Avenues Of Corruption and Bribery Hindering Sustainable ...mentioning

confidence: 99%

Reducing corruption and bribery in Africa as a target of the sustainable development goals: applying indicators for assessing performance

Hope¹

2021

JMLC

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Purpose The purpose of this paper is to assess African performance for substantially reducing all forms of corruption and bribery on the continent by 2030, through the indicators for achieving Target 16.5 of the sustainable development goals (SDGs). Design/methodology/approach Drawing on the available and accessible relevant data from credible sources, this work quantifies, outlines and analyses the relationship between corruption/bribery and sustainable development as it applies primarily to sub-Saharan Africa; assesses the trends in the region through the official indicators for achieving Target 16.5 of the SDGs; and recommends other indicators for assessing ethical behaviour in African political, administrative and business leadership and institutions for achieving sustainable development and improved ethical performance towards significant reductions in all manifestations of bribery and corruption on the continent by 2030. Findings Corruption and bribery are found to affect all SDG-related sectors, undermining development outcomes and severely compromising efforts to achieve the SDGs in Africa. Consequently, prioritising corruption reduction including from money laundering, bribery and other illegal activities is a necessary requirement for achieving sustainable development, good governance, building effective and inclusive institutions as required by SDG 16, and funding the achievement of the SDGs. Originality/value The main value of the paper is the insights it provides through the very comprehensive compilation of statistical information that quantifies, and with analysis, the corruption/bribery avenues and the resultant deleterious effects on sustainable development in Africa.

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“…Indeed, where such contracts are not competitively won, shoddy works are often done which does not permit most projects to last over the expected life span. Ibrahim et al () argue that corrupt public officials distort the government composition as well as misalign expenditure away from growth‐enhancing projects to ‘boondoggles’ which are often of no social and/or economic use. One may argue, based on our findings, that low fiscal deficits incentivize rent‐seeking officials to execute government projects that inures to their selfish interest and does not propel overall growth but merely piles up fiscal deficit.…”

Section: Conclusion and Policy Implicationsmentioning

confidence: 99%

Optimal Deficit Financing in a Constrained Fiscal Space in Ghana

Alagidede¹,

Mensah²,

Ibrahim³

2018

African Development Review

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Ghana's public debt has been on the rise in recent years, raising questions of fiscal sustainability. At the same time prices of Ghana's main commodities such as crude oil, gold and cocoa have not fared well in world markets. Coupled with an underdeveloped financial system and weak domestic revenue mobilization capacity, the higher public debt levels pose a significant challenge to macroeconomic stability, and long-run economic growth. This study contributes to a better understanding of the growth effects of high fiscal deficit in Ghana. We employ annual data spanning 1967-2013 and a sample splitting approach to examine the threshold level of Ghana's fiscal deficit and its impact on the country's economic growth. Our finding reveals an optimal fiscal deficit of 7.6 per cent of GDP. We find that the impact on economic growth of fiscal deficit is negative regardless of the sample splitting. However, our evidence shows that this effect is only statistically significant above the threshold. Although, the impact of fiscal deficit on growth is less clear and debatable, we document that fiscal deficit significantly hurts growth when the level exceeds the threshold. We discuss key implications for policy. Note 1. Results from our unit root tests (Augmented Dickey-Fuller and Phillips-Perron tests) also show that all the variables are stationary after first difference. The results are available upon request from the authors.

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

Cited by 17 publications

References 55 publications

Governance and financial development: Evidence from a global sample of 120 countries

Governance and financial development: Evidence from a global sample of 120 countries

Reducing corruption and bribery in Africa as a target of the sustainable development goals: applying indicators for assessing performance

Optimal Deficit Financing in a Constrained Fiscal Space in Ghana

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