Corruption and Economic Growth: Some New Empirical Evidence from a Global Sample. (31st July 2019)

• Record Type: Journal Article
• Authors: Sharma, Chandan; Mitra, Arup
• Is Part Of: Journal of international development. Volume 31:Number 8(2019:Nov.)
• Page Start: 691
• Page End: 719
• Publication Date: 2019-07-31
• Subjects: corruption -- regulation -- economic growth -- natural resources; Economic development projects -- Developing countries -- Periodicals; Developing countries -- Economic policy -- Periodicals; Developing countries -- Foreign economic relations -- Periodicals; Economic development -- Periodicals; 330.91724
• DOI: 10.1002/jid.3433
• Languages: English
• ISSNs: 0954-1748

Abstract

Abstract: This paper assesses the impact of corruption control and regulation quality on growth across countries over the period 1996 through 2015. After dealing with the possible endogeneity problem through the dynamic panel data models, our findings are suggestive of the positive effects of corruption control. Thus, our analysis tends to support the 'sand the wheels' view at the aggregate level as well as for lower and lower–middle‐income countries. Similar results are also obtained for regulation quality. However, contrary to the theoretical arguments, the joint effect of regulation and corruption does not seem to be significant empirically for countries from any of the income groups. Evidence is also indicative of a positive effect on trade across countries from all income groups. Although our results failed to support the natural resource curse hypothesis, countries with efficient institutions and low level of corruption are not seen to experience any resource curse. Finally, policy implications of these findings are brought out. © 2019 John Wiley & Sons, Ltd.