Corruption and economic development: a puzzling relationship

BEVERLEE B. ANDERSON, CALIFORNIA STATE UNIVERSITY, USA
Purpose – The purpose of this paper is to explore the relationships that are thought to exist between the corruption within a country and selected components that contribute to a country’s sustainable economic development across regions of the world.
Design/methodology/approach – Using data from the World Bank on various aspects of development and data from Transparency International on perceptions of types and levels of corruption, a series of statistical models were developed to examine relationships among corruption in its various forms and dimensions of economic development.
Research limitations – The research is limited by the availability of data from the two sources over the time-frame examined.
Findings – The findings are mixed, showing that some types of corruption have greater negative impact on specific aspects of economic development; however, it appears that the effect may be moderated by other country factors.
Originality/value – The study uses secondary data, which are judged to be the most valid and reliable, and examines a variety of relationships.
Practical implications – The impact of corruption on economic development may be moderated by cultural and “other” factors.
Keywords Corruption levels and Economic Development, FDI, GDP growth and Capital Formation
Paper type Research paper

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