Corruption: Its Persistence, Causes and Consequences

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ProQuest, 2008 - 135 pages
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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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Contents

LIST OF TABLES AND FIGURES
1
PRS Degree of Risk Assessment 130
7
List of Tables
24
Countries by category of corruption
32
Level of Development Chain Matrices for 7States
39
Recursive Vector Autoregressive Results
45
Impulse Responses in the CorruptionGovernance Income Recursive VAR
52
CAUSES
59
Rating Scheme of Corruption
77
Corruption Correlation Coefficients
83
Ordered Logit Regression Results 1
89
Multinomial Logit Regression Results for Model 5
95
CONSEQUENCES
99
GMM Results for Economic Variables
114
LIST OF REFERENCES
120
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