EMPIRICAL EVIDENCE ON DETERMINANTS OF CORRUPTION AND ITS IMPACT ON ECONOMIC GROWTH IN SUB-SAHARAN AFRICAN COUNTRIES
Author: Frank Iyekoretin Ogbeide & Saidi Atanda Mustapha
Volume: 55 Issue No:3 Year:2013
Abstract: This paper investigates the determinants of corruption and its impact on economic growth in 39 sub-Saharan African countries. The corruption index was obtained from the Worldwide Governance Indicators (WGI) and the data span the period 1996 to 2011. In a Barro-styled economic growth model, dynamic panel regressions were conducted for both corruption determinants and growth-corruption models. The panel unit root test following Im, Pesaran and Shin W-stats, model reliability tests and the cointegration test were also conducted. Empirical results from the model to find the determinants of corruption suggest that natural
resources (ore, fuel, food and agriculture), rule of law, and secondary school enrolment (level of literacy) are relevant in explaining corruption in SSA. On the other hand, corruption was important in explaining GDP
per capita. Overall, the results suggest that natural resource wealth, irrespective of the type (ores, fuel, or food and agriculture), tends to consolidate and conserve bad political regimes, which undermines appropriate social-cultural changes that in turn breed corruption as a result of institutional weakness, and in the process distorts economic growth dynamics in the long run. To this end, institutional arrangements should be strengthened to engender upward spiralling economic growth equilibria amongst sub-Saharan African countries.
resources (ore, fuel, food and agriculture), rule of law, and secondary school enrolment (level of literacy) are relevant in explaining corruption in SSA. On the other hand, corruption was important in explaining GDP
per capita. Overall, the results suggest that natural resource wealth, irrespective of the type (ores, fuel, or food and agriculture), tends to consolidate and conserve bad political regimes, which undermines appropriate social-cultural changes that in turn breed corruption as a result of institutional weakness, and in the process distorts economic growth dynamics in the long run. To this end, institutional arrangements should be strengthened to engender upward spiralling economic growth equilibria amongst sub-Saharan African countries.
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