Corruption: Its Persistence, Causes and Consequences
Since the mid-1990s, the empirical literature on corruption has supported the notion that corruption hinders growth or that it 'sands the wheels' of economic development. In the third essay, "Corruption: Consequences", I test for "the sanding the wheels" hypothesis. I also tests the alternative hypothesis put forth earlier by political scientists (in the 1980s) that corruption "greases the wheels" of economic development. By considering a macroeconomic generalized method of moments (GMM) framework with variables including foreign direct investment (FDI), GDP growth, total trade, physical capital and human capital, I found support for the sanding the wheels hypothesis in terms of physical capital accumulation, tertiary enrollment, FDI, and total trade. The greasing the wheels hypothesis was not supported, although the regression results did not show that corruption adversely affects economic growth.
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LIST OF TABLES AND FIGURES
PRS Degree of Risk Assessment 130
List of Tables
Countries by category of corruption
Level of Development Chain Matrices for 7States
Recursive Vector Autoregressive Results
Impulse Responses in the CorruptionGovernance Income Recursive VAR
110 countries Appendix Table bribes bureaucratic capital category of corruption cause corruption causes of corruption Coef./t-stat coefficients consequences of corruption corrupt official corruption categories corruption ratings corruption scores dependent variable endogeneity equation Ergodic essay estimates executive tenure firms free press Freedom House GDP per capita Granger causality greasing the wheels gross national income growth rates high corruption higher impulse responses income growth income sample index of democratization investment law and order less corrupt level of corruption levels of development literature low corruption low income nations Markov transition chain method of moments middle corrupt middle income countries model of corruption multinomial logit multinomial logit model natural resources oo-o ordered logit model Ordered Logit Regression persistence of corruption political competition political participation Political Risk Services Region rent-seeking sanding the wheels South Asia Sub-Saharan Africa Tatu Vanhanen transition chain matrices Transparency International varbasic vector autoregressive wheels hypothesis World Bank