The Impact of Corruption on Economic Growth

Farrag, Noha; Ezzat, Asmaa

doi:10.4018/978-1-4666-9548-1.ch005

Cited by 4 publications

(4 citation statements)

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“…Amiri et al (2017) find that the relationship between transparency and growth is direct and significant, and that is, transparency leads to economic stability, higher growth, and investment. Sbaouelgi (2019) examines the impact of corruption on investment and growth in the MENA region and concludes with the same results as Mauro (1995). Sbaouelgi (2019) also finds that political institutions substantially impact investment and growth.…”

Section: Positive Relationshipmentioning

confidence: 71%

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Corruption and Economic Growth Nexus: What has the Arab Spring Changed?

Kırşanlı

2023

Current Research in Social Sciences

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Corruption is an everlasting phenomenon in the Middle East and North Africa (MENA). It is considered one of the fundamental reasons for the Arab incidents that started in Tunisia in 2011. Considering its devastating effects, this paper concentrates on the impacts of corruption at the macro level following the Arab uprisings. Notably, it investigates the impact of corruption on economic growth between 1996-2020. The paper utilizes panel estimators with country-fixed effect regressions given the results of the Hausman test. Panel estimators help control time-variant unobserved heterogeneity and capture both time and country-specific differences. The results indicate that after the Arab Spring, corruption lowers economic growth in the MENA region. One unit increase in control of corruption score of World Governance Indicators (WGI) decreases economic growth between 1.64-2.98 percentage points depending on the model. The results are robust with alternative corruption indexes such as the International Country Risk Guide (ICRG), Varieties of Democracy (V-Dem), and lastly, the Corruption Perception Index (CPI). Furthermore, the Chow test also confirms that 2011 constitutes a structural break in the history of the MENA region. The outcomes indicate that specific policies need to be implemented to alleviate the adverse impacts of corruption in MENA countries.

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Section: Positive Relationshipmentioning

confidence: 71%

“…Sbaouelgi (2019) examines the impact of corruption on investment and growth in the MENA region and concludes with the same results as Mauro (1995). Sbaouelgi (2019) also finds that political institutions substantially impact investment and growth.…”

Section: Positive Relationshipmentioning

confidence: 71%

Corruption and Economic Growth Nexus: What has the Arab Spring Changed?

Kırşanlı

2023

Current Research in Social Sciences

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“…This misuse is demonstrated in petty (bureaucratic/administrative) and grand (political) forms (Oye, 2013). Petty corruption is the misuse of entrusted power by low- and mid-level government authorities when interacting with citizens who are provided with basic goods and services in the public sector (Farrag and Ezzat, 2016). Grand corruption comprises activities that deform policies or central state actions committed by senior public servants who make major public procurement decisions for their personal benefit or a particular group, allowing them to benefit at the expense of the public good (Oye, 2013; Farrag and Ezzat, 2016).…”

Section: Literature Reviewmentioning

confidence: 99%

The role of e-government in reducing corruption and enhancing transparency in the Afghan public sector: a case study

Ibrahimy

Virkus

Norta

2023

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Purpose The purpose of this study is to explore the role of e-government in reducing corruption and achieving transparency from the perspective of citizens and public servants of the National Statistics and Information Authority in Afghanistan. Design/methodology/approach This study applies a mixed-method research design to explore whether e-government can combat corruption and increase transparency in the public sector of a developing nation. The data collection involves a survey of (n = 280) citizens and interviews with six National Statistics and Information Authority public servants. Data analysis includes descriptive statistics, Spearman’s correlation for the survey and qualitative content analysis for the interviews. Findings The results of this study reveal that e-government distributes and decentralizes power among public servants, reduces corruption and promotes transparency and accountability by reporting corruption through social media, online complaint forms, emails and the 450 toll-free number. In addition, the major factors are identified that reduce corruption through e-government. Research limitations/implications This study proposes a model for using e-government that has implications for designers, developers and policymakers to create user-friendly systems that reduce bureaucracy and physical interactions with public servants while minimizing paper-based systems. Practical implications Governments can reduce corruption among high-ranking public servants by implementing a decentralized system that prevents system manipulation. This involves measures like surveillance, ICT training, process automation, reduced bureaucracy, simplified procedures and real-time customer support. Social implications Despite the potential of e-government to reduce monopoly power and intermediaries among low-ranking officials, high-ranking Afghan officials still engage in corrupt practices. Nonetheless, 75% of Afghans believe e-government promotes transparency and accountability and reduces corruption. Originality/value To the best of the authors’ knowledge, this is the first study in the Afghan public sector that explores the role of e-government to reduce corruption and achieve transparency.

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“…Since the first studies pointed to the impact of corruption on various economic parameters, numerous studies have emerged to address this relationship. Some authors (Farrag, Ezzat, 2016) have contributed to the literature by examining the impact of corruption on growth in little studied countries in Europe and MENA. The results of this paper are also interesting because they show that the region, as a proxy for the level of development, significantly influences the impact of corruption on economic growth.…”

Section: Literature Reviewmentioning

confidence: 99%

Assessment of the Impact of Corruption on Economic Growth in the Context of the Eu's Anti-Corruption Policy

Andrii¹,

Sierova

Huliaieva

2023

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The purpose of this paper is to analyse the impact of corruption on economic growth in EU Member States, taking into account the key elements of the EU's anti-corruption policy. Methodology. The study used GDP as the dependent variable to measure economic growth and Transparency International's Corruption Perceptions Index as the independent variable. Control variables such as GDP per capita, inflation, trade openness, political stability and industrial value added were also included in the statistical model to account for confounding factors affecting the relationship between corruption and economic growth. Historical data series for these variables were collected for the period 2013-2021 for 27 European Union member countries, and the data were normalised to make all indices comparable. The study used multiple linear regression to predict the outcome of the response variable. The results show that GDP per capita has the strongest positive effect on GDP growth, while the CPI has a positive coefficient but no statistically significant effect on GDP growth. Other independent variables, including trade openness, political stability, inflation and industrial value added, also have no statistically significant impact on GDP growth. The predicted growth rates for most countries were relatively accurate, with some exceeding expectations and others falling short. Practical implications. The research suggests that policymakers should focus their anti-corruption efforts on objectives other than promoting economic growth, such as increasing government transparency and accountability, improving public trust in institutions and reducing social inequality. The finding that GDP per capita has the strongest positive effect on GDP growth also highlights the importance of policies that promote economic development, such as investment in education, infrastructure and innovation. Policymakers could also use information on which countries exceeded or fell short of their predicted GDP growth rates to assess the effectiveness of their policies and make adjustments where necessary. Value/оriginality. Applying multiple linear regression using the proposed variables for different analysed periods of data series could be used in evaluating the impact of corruption on economic parameters of different countries set.

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The Impact of Corruption on Economic Growth

Cited by 4 publications

References 35 publications

Corruption and Economic Growth Nexus: What has the Arab Spring Changed?

Corruption and Economic Growth Nexus: What has the Arab Spring Changed?

The role of e-government in reducing corruption and enhancing transparency in the Afghan public sector: a case study

Assessment of the Impact of Corruption on Economic Growth in the Context of the Eu's Anti-Corruption Policy

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