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Determinants of Economic Corruption: A Cross-Country Comparison
Abstract
In recent years, the detrimental effects of bureaucratic corruption gained attention from development economists as well as interna- tional financial institutions and policymakers. Corruption, which was previously ignored and mentioned only with caution, has taken a center stage. Nonetheless, corruption is not a new phenomenon. It is as old as government itself. The current literature on corruption high- lights its harmful effects on growth (see Klitgaard 1988, Shleifer and Vishny 1993, Mauro 1995, Cheung 1996, and Bardhan 1997). How- ever, until recently the growth literature did not adequately explain why corruption is low in some countries and endemic in others.1 The relevant analytical problem is not to assess the harmfulness of cor- ruption but why different political systems foster different levels of corruption. We cannot discern any useful prognosis from the litera- ture on corruption so long as the causes of corruption are not clearly identified. Moreover, the empirical studies on the effects of corrup- tion on economic growth are besieged by endogeneity problems. Few of these empirical studies take into account the possibility that eco- nomic growth or the lack of it can increase or decrease the level of corruption. This article seeks to fill that gap by identifying the determinants of corruption and by examining the extent to which those factors—such as education, political regimes, the type of the state, ethnicity, judicial
... Different factors, some of which are economic and others which are noneconomic (Ahmad et al., 2021) determine corruption. Consumer Price Index (CPI), economic growth, economic freedom, public spending and poverty are only a few of the economic factors that have been recognized by economic research as having an impact on corruption (Ali and Isse, 2003;Al-Marhubi, 2000;Ata and Arvaz, 2011;Bosco, 2016;Gundlach and Paldam, 2009;Justesen and Bjørnskov, 2014;Khan and Pillay, 2019;Omidi et al., 2017;Ondo, 2017;Saha et al., 2009;Saha and Su, 2012;Turedi and Altiner, 2016;Wang, 2016). A number of political issues, including political stability, accountability and form of government, have also been connected to corruption (Achim et al., 2018;Bosco, 2016;Choi et al., 2020;Curti and Mihov, 2018;Kubbe and Engelbert, 2018;Liu, 2020;Sen, 2021, 2023;Schumacher, 2013;Zeeshan et al., 2022;Zhang, 2023;Zhu, 2020). ...
... Malanski and P ovoa (2021) claim that corruption aids economic growth in nations with less economic freedom while impeding it in those with more economic freedom. Corrupt practices are less prevalent in countries with higher economic freedom (Ali and Isse, 2003;Ata and Arvaz, 2011;Saha et al., 2009;Saha and Su, 2012;Turedi and Altiner, 2016). It depends on which economic freedom-related aspects are considered when comparing the prevalence of corruption between poor and wealthy countries that there may be broad disparities. ...
... Type of governance was found to be negatively corelated to 1 (1) (2) (Kubbe and Engelbert, 2018;Liu, 2020;Qia and Yanting, 2023), an increase in type of governance being a factor of corruption mitigation. Economic freedom is determinant of corruption only for European countries, a higher economic freedom being associated with a lower level of corruption (Ali and Isse, 2003;Ata and Arvaz, 2011;Saha et al., 2009;Saha and Su, 2012;Turedi and Altiner, 2016). Regarding the subsample with Asian countries, corruption is influenced positively by political stability and negatively by the type of governance. ...
Purpose
This paper aims to investigate the impact of political stability on corruption by drawing upon a sample encompassing both developed and developing European and Asian countries.
Design/methodology/approach
The dataset, sourced from the Refinitiv database, spans from July 2014 to May 2022. Panel data techniques, specifically pooled estimation and dynamic panel data [generalized method of moments (GMM)] are employed. The analysis encompasses both fixed and random effects models to capture country-specific cross-sectional effects. To validate our findings, we perform a robustness test by including in the investigation four control variables, namely poverty, type of governance, economic freedom and inflation. To test heterogeneity, the dataset is further divided into two distinct subsamples based on the countries’ locations.
Findings
Empirical findings substantiate that political stability (viewed as the risk of government destabilization) has a positive and significant impact on corruption in all analyzed samples of European and Asian countries, though some differences are observed in various subsamples. When we take into account the control variables, these analysis results are robust.
Research limitations/implications
This research provided a panel data analysis with GMM, while other empirical methodologies could also be used, like the difference-in-difference approach. However, our results should be validated by extending the time and the sample to a worldwide sample and using alternative measures of corruption and political stability. Moreover, our focus was on a linear and unidirectional relationship between the considered variables, but it would be interesting to test in our further research a non-linear and bidirectional correlation between them. Furthermore, we have introduced in the robustness test only four economic variables, but to consolidate our findings, we plan to include socioeconomic and demographic variables in future studies.
Practical implications
These outcomes imply that authorities should be aware of the necessity of implementing anti-corruption policies designed to establish effective agencies and enforcement structures for combating systemic corruption, to improve the political environment and the quality of institutions and to apply coherent economic strategies to accelerate economic growth because higher political stability and sustainable development determine a decrease in levels of corruption.
Social implications
At the microeconomic level, the survival of organizations may be in danger from new types of corruption and money laundering. Therefore, in order to prevent financial harm, the top businesses worldwide should respond to instances of corruption through strengthened supervisory procedures. This calls for the creation of a mechanism inside the code of conduct where correct reporting of suspected situations of corruption would have a prompt procedure to be notified of. To avoid corruption in operational procedures, national plans and policies should be developed by government officials, executives and legislators on a national level, as well as by senior management and the board of directors on an organizational level. This might lower organizations' extra corruption-related expenses, assure economic growth and improve global welfare.
Originality/value
A novel feature of our research resides in its broad examination of a sizable sample of European and Asian countries regarding the nexus between corruption and political stability. The paper also investigates a less explored topic in economic literature, namely the impact of political stability on corruption. Furthermore, the study depicts policy recommendations, outlining effective and reasonable measures aimed at improving the political landscape and combating corruption.
... Other studies have shown that many characteristics such as education, economic freedom, federalism and the rule of law all have an impact on corruption. Government size, foreign assistance, historical and geographical determinants, law enforcement, wealth, population, inflation rates, autocratic political regimes, ineffective legal institutions, and cross-national urbanisation are all factors to consider (Ali and Isse, 2003;Serra, 2006;Goel and Nelson, 2010;Elbahnasawy and Revier, 2012). Furthermore, according to Gnimassoun and Massil (2019), corruption in sub-Saharan Africa is influenced by different reasons than corruption in Europe. ...
... The state gross domestic product at a constant price of base 2011-12 Corrado and Rossetti (2018) Govt. expenditure to GDP State government expenditure to GDP Ali and Isse (2003) and Bosco (2016) Poverty rate The percentage of the poor population to the total state population Neudorfer (2015) and Dimant and Tosato (2018) ...
... The percentage of students in tertiary education to the total population Corrado and Rossetti (2018) and Charron (2010) ICT State-wise telephones per 100 population Elbahnasawy (2014) and Ben Ali and Gusmi (2017) Political causes of corruption Law and order No. of the person arrested per 100,000 population for all the cognisable crimes committed (state-level) Ali and Isse (2003) and Herzfeld and Weiss (2003) Policy ...
Purpose
The purpose of this paper is to measure and investigate the determinants of corruption across Indian states.
Design/methodology/approach
This research begins by developing a corruption index (CI) based on official data on corruption cases. Second, the authors also create an adjusted corruption index (ACI) using the stochastic frontier modelling approach to address corruption case under-reporting. Third, they use a panel feasible generalised least square (FGLS) technique to discover corruption determinants.
Findings
The results show that approximately 77% of corruption cases in India go under-reported, which is a major concern. The results also show that per capita income, government spending, law and order and urbanisation are the important factors affecting corruption at the regional level.
Practical implications
The findings of the study emphasise the need to address the huge under-reporting of corruption data. From a policy perspective, the governments need to emphasise factors like per capita income, government spending, law and order and urbanisation to tackle corruption in India.
Originality/value
Corruption is a complex global phenomenon, and several studies have conducted detailed research on the causes of corruption at all levels (regional and cross national), but this study differs from previous studies in the following ways. First, the authors used a more objective measure of corruption by developing a CI at the state level. Second, the study uses stochastic frontier analysis, which is novel in the literature on corruption analysis, to address the most critical component of under-reporting in corruption data. Finally, the study attempts to examine the factors of corruption at the regional level, which is again innovative in nature.
... Despite its negative consequences, economists are yet to properly understand the steps that should be taken to reduce corruption (Ades & Di Tella, 1997). Furthermore, whereas researchers have established that corruption influences certain macroeconomic variables which include trade, underdevelopment, savings, investment, and growth, they have paid less attention to corruption determinants until recently (for example see Ali & Isee, 2003;Swaleheen, 2008;Zhang, Cao, & Vaughn, 2009). Moreover, most studies that were conducted to ascertain the determinants of corruption focused on a group of countries, employing either cross-section or panel data (see Ades & Di Tella, 1997;Ali & Isee, 2003;Elbahnasawy & Revier, 2012;Evrensel, 2010;Fisman & Gatti, 2002;Goel & Nelson, 2005;Iwasaki & Suzuki, 2012;Park, 2003;Serra, 2006;Triesman, 2000Triesman, , 2007Zhang et al., 2009). ...
... Furthermore, whereas researchers have established that corruption influences certain macroeconomic variables which include trade, underdevelopment, savings, investment, and growth, they have paid less attention to corruption determinants until recently (for example see Ali & Isee, 2003;Swaleheen, 2008;Zhang, Cao, & Vaughn, 2009). Moreover, most studies that were conducted to ascertain the determinants of corruption focused on a group of countries, employing either cross-section or panel data (see Ades & Di Tella, 1997;Ali & Isee, 2003;Elbahnasawy & Revier, 2012;Evrensel, 2010;Fisman & Gatti, 2002;Goel & Nelson, 2005;Iwasaki & Suzuki, 2012;Park, 2003;Serra, 2006;Triesman, 2000Triesman, , 2007Zhang et al., 2009). ...
... Interestingly, Nguyen and van Dijk (2012) advocated for country-specific studies on corruption, because it can aid our understanding on why and how corruption affects the economy, and therefore provide policy prescription to governments to remedy the situation. In the same vein, Ali and Isee (2003) opined that once the main drivers of corruption have been established, appropriate policy conclusions can be drawn from an empirical exercise, leading to the design and implementation of policies to checking and/or reducing the harmful impacts of corruption. Furthermore, Athukorala and Sen (2004) argued that cross sectional studies are based on highly restrictive assumptions, and any results from them might not be acceptable by all. ...
:Nigeria has failed to mobilize adequate savings required to attain high levels of
economic development, and the country has consistently ranked among the most corrupt
nations in the world. This study investigates the effect of corruption on domestic savings in
Nigeria over the 1984-2016 period using the ARDL-bounds testing approach. The result of
the bounds test to cointegration demonstrates a long-run relationship between savings and
corruption (along with income level, inflation rate, real interest rate, age dependency rate, and
unemployment rate). The estimation results indicate that reducing corruption is associated
with higher savings. Other important determinants of savings in Nigeria are income level,
inflation rate, real interest rate, age dependency rate, and unemployment rate. Based on these
empirical outcomes, this study recommends policies to reduce corruption to encourage
savings in Nigeria. These policies should be complemented with measures to raise income
level and real interest rate, including reducing the inflation rate, age dependency rate, and
unemployment rate to promote savings in Nigeria.
... As suggested by the legitimacy theory, providing an enabling environment for private sector organisations to thrive (such as controlling corruption in the society) is critical for MNEs to fulfil their social contracts. Thus, jurisdictions characterised by high level of corruption/low control of corruption will provide an enabling environment and the motivation for organisations to circumvent environmental laws (Tawiah, 2023); thus, high emissions are overlooked since there may be no consequences (Ali and Isse, 2003). When public institutions are corrupt, this may contribute to carbon emissions since the existing institutional structures may not penalise such breach of environmental regulation (Houqe and Monem, 2016). ...
... The result provides empirical evidence to buttress the argument that jurisdictions characterised by high level of corruption/low control of corruption will provide an enabling environment and the motivation for organisations to circumvent environmental laws (Tawiah, 2023), and high emissions may be overlooked since there may be no consequences for environmental pollution (Ali and Isse, 2003). The result buttresses the criticality of maintaining the decency and integrity of public institutions to realise net zero targets. ...
This study investigates the impact of country governance mechanisms on carbon emissions performance of private sector organisations, using empirical evidence from 336 top multinational entities (MNEs) over a 15-year period. The results show that, at the aggregate level, Control of Corruption (b = − 0.021, p < 0.01) and Voice & Accountability (b = − 0.015, p < 0.05) are significantly and negatively associated with carbon emissions rate. While Political Stability (b = 0.007, p < 0.05) and Government Effectiveness (b = 0.018, p < 0.05) have significant positive impact on carbon emissions rate, the impact of Regulatory Quality and Rule of Law is negative but insignificant. Empirical evidence supports the conclusion that the existing institutional environment is not sufficient to deliver the net zero transition. There is a need for more coordination, strategic planning, and delivery monitoring in government institutions to achieve decarbonisation targets. The study contributes to knowledge within the context of the identified research gaps. First, the study adds to the limited literature on the impact of country governance on carbon emissions reduction, particularly with reference to scope 3 emissions. Second, with the sustainable development goals (SDGs) set to expire by 2030, the study provides empirical evidence on efforts governments of countries are making in achieving decarbonisation targets through improvement in country governance quality. Third, the study shows that the impact of the country governance on the carbon emissions performance of MNEs is contextual and varies across jurisdictions/geographical regions. Finally, the paper contributes to the debate on the actualisation of Agenda 2030, because presenting empirical evidence on the impact of country governance mechanisms on carbon emissions reduction-particularly scope 3 emissions-is an important discourse in the realisation of the SDGs.
... In terms of the association between corruption and education, studies find that amongst the determinants of corruption, education also plays a role [3]. reported a negative effect of possessing secondary level education on corruption. ...
... For further validation, we ran the first stage regression checks and Minimum eigenvalue statistics. The F (3,98) or Eigenvalue for the first stage regression shows a high value (504.73) with significance at 1% which shows variables used for the first stage regression are appropriate and strong. ...
... An independent judiciary would promote rule of law which would make citizens of a country to accept and repose confidence on the established institutions to make and implement laws and adjudicate disputes. Authors such as Ali and Isse (2003), Rark (2003), Leite and Weidmann (1999) have all suggested that a strong rule of law reduces likelihood of corruption.The wages level of civil servants has been found to have effect on the rule of law and the quality of bureaucracy and therefore have an impact on corruption (Rijekeghem and Weder, 1997). It has been observed that wages of civil servant in most developing countries are low which may encourage them to be corrupt. ...
... On the impact of culture on corruption,Lederman et al (2005) observed a negative relationship between ethno linguistic homogeneity and level of corruption. According to Ali and Isse (2003) in heterogenic communities, a civil servant behaves sequentially. First to his close kin, to his ethnic group, and then may be to his country. ...
For the fact that in Nigeria corruption has become a social epidemic and economic pathology to the extent that those who claim to be right physicians as the previous and current revelation have shown, have ironically come out as patients of the disease. Thus the paper attempts to determine the socioeconomic determinate of corruption, using contents analysis to explain it. Sociological perspective of Functionalists and Marxist paradigms were used. It also argues that Nigeria's socioeconomic failure due to corruption can be easily recognized when we compare her with huge populous, ethnically diverse-rich nations. The idea of sustainable socioeconomic development is predicted on the creation of healthy, societies that can sustain the present generation as well as those that follows through the judicious use of economic, environmental and cultural resources which have always been a mirage due to persistent corruption. Having observed the strong relationship between corruption and socioeconomic development in Nigeria, the paper concludes that corruption is a national disaster that has eaten so deep into the entire fabric of the Nigerian society, it confers undue benefits on few people contrary to legal and moral norms of the society. in addition to its contagious and incurable infection, it undermines authority's effort to provide welfare for all citizens as the resources to do this are in the hands or at the reach of no fewer than 1% of the population. the paper therefore recommends that "institutional approach " and" no sacred cow" are the only antidotes that can fight this monster called corruption. the fight must be a genuine and collective one, if Nigerian's desired economic and democratic growth and this can only be possible by a determined, blunt, firm and resolved leadership and followership.
... Thus the large size of public sector is associated with the greater corrupt behavior (Seldadyo & De Haan, 2006). Similar results are found in Ali and Isse (2003). While in the short run it affects corruption negatively but significantly. ...
... This result shows that as FDI inflow increases in the home country, it has deterred corruption significantly (Larraín & Tavares, 2004). However, FDI has a positive and significant impact on corruption in the long-run (Ali & Isse, 2003). ...
Remittances play a very important role in a political economy perspective that how do remittances impact corruption in the recipient economy? This paper explored the hypothesis that whether the remittances worked as a cure by decreasing corruption being a political resource (accountability perspective), or remittances worked as a curse by allowing the government to divert spending from public goods provision (substitution perspective). The autoregressive distributed lag (ARDL) method is used to check whether a long-run equilibrium exists among selected indicators from 1984 to 2018. The Error Correction Model was used to get the short-run regression results. Empirical analyses have shown the support for remittances being a curse, not a cure for Pakistan in the long run whereas, short-run results revealed reversed resource curse hypothesis.
... In a cross-country comparison Ali and Isse (2003) identified several factors that influence fraud and corruption, namely, education, political regime, foreign aid, ethnicity, judicial efficiency, political and economic freedom, and the size of government. Their research provided empirical support for a significant negative relation between corruption and judicial efficiency, economic freedom, and education and a significant positive link between corruption and size of government, and between corruption and foreign aid. ...
... Corruption harms economic development in nations with a higher level of economic freedom and supports economic growth in nations with a lower level of economic freedom (Malanski and Santos Povoa 2021). Higher economic freedom reduces the level of corruption and fraud (Ali and Isse 2003;Saha et al. 2009;Ata and Arvas 2011;Saha and Su 2012;Turedi and Altiner 2016). ...
Fraud is one of the most harmful phenomena, because it leads to collapse of organizations, causes economic downfall of countries, and destroys faith in a country’s capital markets. The impact of fraud is complex and has varying degrees depending on political and financial institutional structures of a country. In this paper, we investigate the combined effect of economic and non-economic variables on fraud using a sample of 41 developed, in transition, and developing European countries. The data cover the period July 2014–December 2020. Panel data techniques of pooled estimation and the dynamic panel data/generalized method of moments (DPD/GMM) is used, keeping in view the endogeneity perspective. Nevertheless, two-way impacts of fixed effect model estimation—cross-sectional and time-based (panel) effects (alternatively)—are used for analyzing the relationship among the given variables, based on Hausman specification test results. Empirical results of panel data extended REM and FEM approaches with country-specific cross-sectional effects showing that political stability, economic freedom, poverty, and GDP significantly affect fraud proliferation. Political stability is appraised to be the most scoring determinant of fraud incidence in a country.
... The index covers print, Corruption can be restrained when the laws are rigorous and enforced to punish corrupt behaviour. Countries with strict laws and effective judicial systems tend to be less corrupt(Ali and Isse 2002;Elbahnasawy and Revier 2012). We employ the composite index of Rule of Law developed by the World Bank's WGI. ...
... Good governance system encompasses transparent, accountable, and inclusive policy-making processes that foster sustainable development. Numerous studies highlighted the impact of governance on environmental outcomes [32][33][34][35][36]. O'Riordan and Pennington [37] emphasized the role of leaders and stakeholders in the process of reaching this target. ...
... Similarly, Arikan (2004) displayed that corruption may be lower in countries with higher extent of fiscal decentralization due to bureaucrats in a fiscally decentralized economy are less able to engage in rent-seeking behaviour. Hence, corruption and rent-seeking are state system failures indicating institutional weaknesses, determining negative economic effects (Dincă et al., 2021), causing redistribution of resources and malfeasance (Ali & Hodan, 2003) since the rent-seeking is unproductive, destroys value by wasting valuable resources (Tollison, 2012) and is associated with the inflation processes in the economy (Åslund, 1999). High inflation, in turn, leads to uncertainty (Atkinson, 1998), which is conductive to corruption . ...
In studies on the functioning of the public sector there are surveys examining the determinants of corruption, including the level of fiscal decentralisation in the light of economic and social development. However, there is a dearth of survey data presenting the impact of the revenue side of this decentralisation in the context of civil liberties. us, the aim of the paper is to examine the influence of tax revenue decentralisation and civil liberties on corruption based on the OECD countries, taking into account the impacts of a country's size, scope of the public sector and public procurements, macroeconomic uncertainty , and interactions between tax revenue decentralisation and civil liberties on the phenomenon under study. e empirical study concerns 38 OECD countries in the period 2012-2022. erefore, longitudinal data models were estimated, namely the fixed effects model and panel quantile regression with fixed effects using the method of moments. e survey showed that an increase in tax revenue decentralisation causes a decrease in corruption. In addition, civil liberties and their interaction with aforementioned decentralisation may determine corruption; however, this is heterogeneous throughout the distribution of corruption level. In addition, the scope of the public sector and macroeconomic uncertainty stimulate rent-seeking behaviour, which weakens the institutional foundations to counteract corruption. us, policymakers should be aware that the growing scope of the public sector, government fragmentation, and the functioning of bottlenecks in the performance of official duties at sub-national level might lead to a decrease in the efficiency of anti-corruption policy or programmes. Based on the findings, it is crucial to ensure price stability to reduce the analysed dysfunction.
... The negative impact of human capital on corruption aligns with the empirical studies of Ali and Isse (2002), Serra (2006), Rehman and Naveed (2007), and Evrensel (2010). In this regard, Gani (2017) explains that a community with better education is more prone to effectively scrutinize public spending and is better equipped to judge any form of political corruption. ...
Corruption and informality are issues which have attracted a great amount of empirical research, since they are variables that can affect economic development in various and complex ways, with direct and indirect effects on economic growth. In this context, the objective of this investigation is to assess the impacts of corruption and informality on economic growth and productivity in countries from Latin America and the OECD (Organisation for Economic Co-operation and Development). To achieve this, a 3SLS-GMM estimation is proposed to manage the endogeneity of the variables in the system of equations. Subsequently, a simulation analysis is conducted to quantify the impacts of increases in corruption and informality on growth and productivity, as well as the influence of human capital in counteracting these impacts. The main findings of the research are as follows: (i) corruption decreases economic growth and productivity in both groups of countries; (ii) informality negatively affects economic growth and productivity; (iii) increases in corruption and informality reduce economic growth and productivity; and (iv) human capital has a positive impact on economic growth and reduces the negative impacts of corruption and informality.
... However, from a different perspective's view, Ali and Isse (2003) proclaim the idea that an understanding of the sources of corruption will be helpful in the creation and redesign of policies, which can influence the reduction of the negative implications of corruption. Belloumi and Alshehry (2021) examined the influence of CC on investments, economic growth, and the conditions of doing business for Gulf Cooperation Council countries covering the period 2003-2015. ...
The research paper experimentally examines the influence of corruption control (CC), lending interest rate (LIR), regulatory quality (RQ), government effectiveness (GE), and domestic credit to the private sector (DCPS) on the ease of doing business (EDB). To reach the expected objective, the investigation employs balanced data for all six countries of the Western Balkans, covering the period 2014–2020, employing regression analysis with fixed effects. The approach and parameter selection are guided by the insights from Nageri and Gunu (2020) as well as Belloumi and Alshehry (2021). The discoveries of the research provide evidence that CC, LIR, and RQ have a statistically significant negative influence, versus DCPS has resulted in a significant positive influence on the EDB. The originality and creativity of this investigation lay in the fact that it is a combination of economic and governing variables that are immediately reflected in the favorable environment for doing business. The discoveries of the investigation will be beneficial to the expansion of existing literature in the academic sphere and serve as avenues for proactive discussions among business managers, and students, as well as the policy-making structure concerning the possible implications that can be drawn based on the results of the research.
... The awareness of the dramatic effects of corruption on an economy leads to investigation of why corruption exists and what makes it so differently and widespread among countries. A number of studies have recently pointed out the correlation between a large set of variables and corruption (Ali and Isse, 2002;Park, 2003;Sosa, 2004;Serra, 2006;Khan, 2006;Del Monte and Papagni, 2007;Shabbir and Anwar, 2007;Ghaniy and Hastiadi, 2017;Mathur and Meyer, 2017;Maguire, 2018;Nurudeen and Waldemar Staniewski, 2019;Saleem et al., 2019), Borlea et al., 2019;Fungacova et al., 2019;Park and Kim, 2019;Hunady, 2019 andNurudeen andStaniewski, 2019;Fonchamnyo and Nginyu, 2023). However, all these studies have suggested several factors that affect corruption but the public sector employment have not yet been taken into consideration. ...
While the effect and determinants of corruption is well discussed in the literature, less attention has been given to how public sector employment affect corruption. The purpose of this paper is investigate the effect of public sector employment on corruption. Using data from 45 countries covering from 2002 through 2007, we employed Ordinary List Square (OLS) estimation technique to estimate the baseline model where we included both the linear and quadratic term of public sector employment to take of the non-linear relationship while adding a set of control variables. Our results suggest that public sector employment has a positive effect to control of corruption and beyond a particular threshold it turns to be a source of corruption. The results are robust even when we correct for endogeneity by using a static system-GMM technique of estimation. This means that governments should only employ a limited number of people which can permit her to render the basic functions of the state and make its economy more private sector oriented so as to scare away from corrupt practices.
... However, contrary to conventional wisdom, interviews with IEs indicate these smaller and more adaptable operators were not particularly deterred by legal ambiguities. This is demonstrated by the following statement from Laos: When interviews explored the corruption that typically arises from legal ambiguities (Ali and Isse, 2002;Roy and Oliver, 2009), IEs from Laos, Cambodia, and Vietnam indicated some corruption being acceptable in return for uncomplicated investment climates: ...
The discipline of International Entrepreneurship (IE) conceptually rests upon the foundations of entrepreneurship and international business – with theory typically derived from larger corporations and mature markets. Through comparison between IE in emerging and mature contexts, and individual and corporate entrepreneurship, distinctive features of individual IE in emerging markets are identified. A series of case studies conducted in Laos, Cambodia, and Vietnam document how incremental innovation underpins IE; how foreignness helps IEs spot opportunities (unrecognized by locals); how simple bureaucracies (commonly found in emerging markets) invigorate IE; how startups in emerging environments embody assimilation (larger international corporations cannot match) – and how this assimilation (combined with being small and nimble) enables IEs to thrive within ambiguity and institutional voids. Most importantly, this study challenges the applicability of institutional and transaction cost theory to explain market entry modes of individual IEs in emerging markets. Contrary to conventional wisdom, institutional voids were not found to deter these IEs. Rather, these IEs’ primary concerns relate to pro-business dispositions among authorities, simple bureaucracies, and uncomplicated investment climates.
... In addition, as Rauch and Evans (2000) point out, Weberian principles of public administration (especially meritocracy) lower corruption due to the higher quality of bureaucracy (see also Gurgur and Shah 2005;Brunetti and Weder 2003). Multiple analyses (Lederman et al. 2001;Ali and Isse 2003;Gurgur and Shah 2005;Fisman and Gatti 2002) have shown decentralization to have a reducing effect on corruption, whereas federalization has the opposite effect (Kunicová and Rose-Ackerman 2005;Damania et al. 2004;Treisman 2000;Goldsmith 1999). ...
An elaborate body of academic debate deals with public sector corruption as a detrimental social problem. Considerable attention has been paid to the contextual factors of corruption and the role of wider societal norms and institutions in enhancing or deterring corrupt practices. However, there is only a limited amount of knowledge available on one factor – the size of countries. Are small or large countries more prone to corruption? There are a few studies that aim to clarify this issue, but the findings are contradictory. The aim of the article is to turn to a stream of social science research specifically interested in country size – small state studies – and to explore the relevance of this knowledge for understanding public sector corruption. The analysis shows that country size is a significant contextual characteristic that affects economic, political and socio-cultural factors of corruption. The article raises the need for further studies into causal mechanisms of size by including more small states into international comparative research, turning attention to qualitative comparative studies, and taking a closer look at the link between socio-cultural factors of corruption and country size.
... Several other studies link corruption with the economic conditions of a given country. A country experiencing economic conditions of poverty will tend to have high levels of corruption that will further worsen development (Shleifer and Vishny 1993;Ali and Isee 2003). Dreher and Schneider (2010) empirically verified a weak correlation between corruption and informality. ...
One of the factors that characterize the different countries of the Balkan area is the level of corruption which, as often stressed by scholars, may significantly influence the economic growth of its countries. However, there is still no agreement on the sign of this effect: there are theoretical arguments and empirical results in favor of a positive correlation between corruption and growth, and there are also theoretical arguments and empirical results that support the opposite view. Comparing the short-term and long-term impacts can help to explain this contradiction. In this perspective, we propose an auto-regressive distributed lag (ARDL) methodology. This approach gives both short-run and long-run results simultaneously and it is robust with small samples. The results are not homogeneous for the eight countries covered by our study (Bulgaria, Croatia, Greece, North Macedonia, Romania, Serbia, Slovenia, and Turkey), but the following theoretical intuition is confirmed: although corruption could be seen as a factor that helps economic growth by speeding up the bureaucratic processing in the short run, conversely, in the long run, the social costs associated with corruption are considerable, making it difficult to sustain the political, economic, and social burdens, thus leading to a higher levels of corruption that negatively affect the economic growth. These results confirm certain aspects of Albert Hirschman’s ideas regarding private interests and public action.
... Wyatt's meticulous analysis, outlined in his paper on 'Corruption, productivity and transition', underlines the profound impact of corrupt practices on economic progress. This is corroborated by the findings of Ali and Isse (2003) who, in their paper on the 'Determinants of Economic Corruption', identify a significant reduction in growth associated with corruption. It is important to note, however, that the relationship between corruption and GDP growth is not universally consistent. ...
Corruption is a persistent challenge faced by developing countries, with far-reaching economic consequences. This paper with a concise yet comprehensive definition of corruption and examines its prevalence in developing countries. It then examines the determinates of corruption in these contexts, highlighting the multiple factors that contribute to its persistence as background information. Subsequently, this paper comprehensively analyzes the economic impact of corruption in developing countries, focusing on economic indicators of GDP per capita, economic and GDP growth, foreign direct investment (FDI), and the relationship between the public and private sectors. Empirical evidence from various studies highlights how corruption hinders economic growth, exacerbates income inequality, and deters both domestic and foreign investments. The intricate nexus between corruption and economic development underscores the need for targeted anti-corruption policies, improved governance, and enhanced transparency.
In the second part of this paper, a case study of corruption's role in a specific country, Turkey, illustrates these dynamics. By addressing corruption head-on and fostering a culture of integrity, developing countries can unlock their economic potential, promote equitable growth, and improve the well-being of their citizens.
... In addition to the macroeconomic effects associated with aid, poor institutions, governance, (Bräutigam & Knack, 2004), and economic policy (Burnside & Dollar, 2000, 2004 might impair aid from positively affecting growth. Some studies have found that aid increased corruption (Ali & Isse, 2003;Djankov et al., 2008) by strengthening the predatory power of the government. In contrast, Tavares (2003), Okada and Samreth (2012), and Selaya and Thiele (2012) found that aid reduces corruption because the grant component of aid improves bureaucratic quality. ...
... Sin embargo, el tener altos impuestos no necesariamente implica más corrupción (Martin et al., 2007); por lo que pueden ser los obstáculos excesivos y no la implementación, la causa de la corrupción. Ali & Isse (2003) por su parte encontraron el efecto de la libertad política, como otra causa de corrupción, aunque con efecto inverso y no directo, pues este se traslada vía libertad económica. De esta forma concluyen que una democracia no garantiza que un país no sea corrupto. ...
El soborno como temática se ha centrado en análisis de causalidad e impacto y en muchos de los casos supeditado como una tipología más de la corrupción. A partir de los microdatos del Barómetro de Corrupción Global de Transparency International se busca determinar para un conjunto de países seleccionados de América Latina y el Caribe, las variables dependientes para predecir la probabilidad de pagar soborno al tener contacto con las personas, empresas o entidades que le prestan servicio. Se utilizan técnicas de estadística inferencial, como la regresión logística aplicando el método de máxima verosimilitud y proceso iterativo hasta encontrar el mejor modelo. De una encuesta inicial con 117 variables, resultaron 11 que explican mejor la probabilidad de pagar un soborno. Variables como el grado de escolaridad y la influencia de funcionarios y políticos afectan la disposición de las personas a pagar un soborno. Tópicos significativos de este estudio como la retaliación para favorecer votaciones y los favores sexuales para recibir beneficios, aunque incipientes en su estudio, valen su profundización investigativa. Este trabajo sirve de base para motivar estudios con microdatos que ayuden a entender mejor y de manera específica las tipologías de corrupción a través de modelos que predicen comportamientos del ciudadano del común.
... The coefficient of corruption is -0.043576, it means that one unit increase in corruption lead to decrease 0.043576% of GDP per capita. The negative impacts of corruption on economic growth agree with the finding of (Mo 2001;Ali & Isse 2003;Omenka 2013;Aliyn & Elijah , 2017;Duhu 2019). The coefficient of unemployment is -0.298100 and statistically significant, it indicates that 1% increase in unemployment, 0.298100% of GDP per capita is lost. ...
The main objective of this empirical study to examine the impact of corruption, unemployment and inflation on economic growth for seventy nine (79) developing countries of the world for the period from 2002 to 2018. This study uses Panel unit root tests (PUT), Pooled Mean Group (PMG), Fully modified ordinary least square (FMOLS), and Dynamic least square (DOLS), for the data estimation. The estimates of PUT reveal that all the variables are mixed order of integration. The PMG, FMOLS and DOLS estimates reveal that corruption, unemployment and political stability have negative effect on GDP per capita, while Inflation, governance effectiveness and rule of law have positive effect on GDP per capita. This empirical study has some policy implication for government and policy makers.
Graphical Abstract
... Mais depuis l'apparition de la Nouvelle Economie Institutionnelle (NEI) 1 dans les années 1970, les analyses théoriques et empiriques s'accordent à reconnaître le rôle de la qualité des institutions sur la croissance économique, ainsi que sur l'attractivité des IDE. Celles-ci montrent que la bonne gouvernance en général, et la lutte contre la corruption en particulier, constitue un facteur important d'attractivité des IDE (Wei, 2000 ;Celentani et Ganuza, 2002 ;Habib et Zurawicki, 2002 ;Ali et Isse, 2003 ;Quazi, 2014 ;Hajzler et Rosborough, 2016). Paradoxalement, l'expérience des pays de l'Asie de l'Est montre que ces pays,qui pourtant sont aujourd'hui parmi les plus corrompus dans le monde, constituent une destination populaire pour les investisseurs étrangers 2 . ...
Impact de la corruption sur l'attractivité des IDE : les résultats d'une étude empirique menée en zone CEMAC 173 Impact de la corruption sur l'attractivité des IDE : Les résultats d'une étude empirique menée en zone CEMAC Résumé: L'objet du présent article est d'évaluer l'impact de la corruption sur l'attractivité des IDE en zone CEMAC. Pour tester notre hypothèse selon laquelle il existe une relation négative entre la corruption et l'attractivité des IDE en zone CEMAC, nous avons utilisé la Méthode des Moments Généralisés (MMG) en panel dynamique des six pays de la zone dans la période allant de 1996 à 2016. Les résultats montrent que le contrôle de la corruption impacte positivement et significativement l'attractivité des IDE dans cette sous région. Par conséquent, une augmentation du contrôle de la corruption va minimiser le niveau de la corruption et amener les étrangers à investir plus dans cette zone.Au regard de ces résultats, des recommandations ont été faites pour que la lutte contre la lutte contre la corruption puisse attirer davantage des IDE dans cette zone. Abstract: The purpose of this paper is to evaluate the impact of control of corruption on the FDI of the CEMAC zone. To test our hypothesis which there exist a negative relation between corruption and attractiveness of FDI in the CEMAC zone, we have used the Generalized Method Moment (GMM) in a dynamic panel of the six countries of the zone for the period 1996-2016. The results from the analysis show that there a significant positive impact of the control of corruption on the attracting FDI of the sub-region. Therefore, an increase in the control of corruption will minimize the level of corruption which will give more incentive to foreign investors willing to invest to the region. Considering the results, the recommendations have been set up for the control of corruption to attract more and more FDI in this zone.
... An alternative methodology that deals with reverse causality and heterskedasticity is three-stage least squares, as done by Croix and Delavallade (2011). 9 On one hand, several cross-country studies find a significant RoL coefficient (Ades and Tella 1997;Leite and Weidmann 2002;Broadman and Recanatini 2001;Brunetti and Weder 2003;Herzfeld and Weiss 2003;Ali and Isse 2002;Park 2003;Damania et al. 2004;Croix and Delavallade 2011;Iwasaki and Suzuki 2012;de Mendonça and da Fonseca 2012;Elbahnasawy and Revier 2012). On the other, several papers find significant coefficients among alternative governance indicators; some related to current policies (e.g., government effectiveness, decentralization, freedom of the press, federal system, women in parliament, etc.) and others associated to the origins of the legal system. ...
Corruption is an endemic societal problem with profound implications in the development of nations. In combating this issue, cross-national evidence supporting the effectiveness of the rule of law seems at odds with poorly realized outcomes from reforms inspired in the academic literature. This paper provides an explanation for such contradiction. By building a computational approach, we develop three methodological novelties into the empirical study of corruption: (1) modeling government expenditure as a more adequate intervention variable than traditional indicators, (2) generating large within-country variation by means of bottom-up simulations (instead of cross-national data pooling), and (2) accounting for all possible interactions between covariates through a spillover network. Our estimates suggest that, the least developed a country is, the more difficult it is to find the right combination of policies that lead to reductions in corruption. We characterize this difficulty through a rugged landscape that governments navigate when changing the total budget size and the relative expenditure towards the rule of law. Importantly our method helps identifying the—country-specific—policy issues that complement the rule of law in the fight against corruption.
... The association between the education and control of corruption is also found positive and significant, indicating that an increase in education will help in controlling corruption. The result in line with the studies of Ali and Isse (2002); Seldadyo and De Haan (2005); Del Monte and Papagni (2007) also reported that education helps in controlling corruption. The result suggested that citizens with higher education can better understand the government operations and their rights and responsibilities to supervise the government and also ask for government transparency. ...
Purpose
This study aims to examine the relationship between e-government and corruption in selected South Asian countries (Pakistan, India, Bangladesh and Sri Lanka).
Design/methodology/approach
The sample data were gathered from reliable secondary sources over a sample period of 2003–2018. Additionally, this study incorporated other potential determinants or corruption, such as government effectiveness, press freedom, education and economy. To assess sample data, this study used panel data econometric procedures.
Findings
Results indicated that e-government had a positive and significant impact on corruption. Similarly, government effectiveness and education had a positive and significant influence on corruption. However, press freedom and the economy showed a negative and insignificant impact on corruption. This study further found the robustness of the results through sensitivity analysis. Overall, it was concluded that e-government plays a significant role to reduce corruption.
Originality/value
The governments should implement the e-governance system and provide a transparent and accountable environment to eliminate corruption.
... The coefficient of Education Level describes that higher education levels in a country make it less inclined towards corruption. Higher education improves citizens' ability to judge better the politician's performance and control government's activities Ali and Isse, (2002). In comparison, the previous studies have focused on the number of women in national assembly's in developing economies and found that more participation of women in national parliament is related to lower corruption levels than men in national assembly's or those positions. ...
... Blackburn et al. (2010) show that high economic growth deters corruption. Ali and Isse (2003) find that education, judicial efficiency, and economic freedom are significant determinants of corruption. In addition to economic factors, prior studies have argued that political institutions are significant determinants of corruption. ...
This paper investigates whether the International Public Sector Accounting Standards (IPSAS) is a potential enabler or constrainer of corruption in developing countries. We employ the System Generalised Method of Moments on a sample of 77 developing countries between 2005-2017. We find that IPSAS is negatively and significantly associated with corruption, suggesting that the adoption of IPSAS helps in controlling corruption in developing countries. The results still hold after accounting for IPSAS experience and the adoption of other international accounting standards. However, in further analyses, we find that the negative impact of IPSAS on corruption is more pronounced for countries that have fully adopted the accrual-based IPSAS. This study, therefore, provides evidence to policymakers on why developing countries should adopt IPSAS, especially in the fight against corruption.
... 4 The level of integration in the world economy, measured by the weight of international trade, is negatively correlated with corruption, according to Ades and Di Tella (1997), Sandholtz and Koetzle (2000), Gokcekus and Knörich (2006) and Neeman et al. (2008). Other economic features, such as international financial flows (Wei and Shleifer 2000), financial aid (Ali and Isse 2003), the degree of market competition (Laffont and Tchetche 1999), the inflation rate (Braun and Di Tella 2000;Braun 2004) and temporal budget increases derived from the celebration of mega-events (Olmos et al. 2020), are also mentioned as determinants of corruption. In addition, factors related to government size may affect the relationship between economic variables and perceived corruption: Kotera et al. (2012) find that perceived corruption increases with public spending when democracy is weak, and vice versa. ...
This paper studies the relationship between government ideology and the level of perceived corruption, using a panel data of OECD countries covering the years 1996–2015, and the effect that the Great Recession has exerted on that relationship. We find that, before the onset of the Great Recession, governments formed by one (or more) right-wing parties are perceived as being around 1% more corrupt than those formed by one (or more) left-wing parties. We also find that misuse of public funds under coalitional governments is more likely to be perceived, that the longer the party of the current chief executive has been in office, the higher is the level of perceived corruption, and that minority governments and parties with a greater weight in the legislative chamber are also perceived as being more corrupt. However, the Great Recession has altered these relationships, increasing perceived corruption as the elections come closer, and softening or changing the impact of other political variables on perceived corruption.
... The studies carried out by Johnson, Kaufmann andZoido-Lobaton (1998), Bonaglia, et al. (2001) and Fisman and Gatti (2002) found a positive correlation between corruption and the size of the unofficial economy. But some studies have contrary findings like Treisman (2000), Ali and Isse (2003). They found a positive impact of state intervention; state intervention reduces the level of corruption. ...
Corruption is a important trouble and social ethics has a remarkable impact on all countries. It is a fact which exists in many countries and a trouble for the economy. Economists and various researchers in recent years have shown an increasing interest in studying the phenomenon of corruption and its impact on economic growth. This study aims to investigate the causal relationship among corruption, economic freedom and economic growth in some selected Sub-Saharan African (SSA) countries with a view to making policy implications using the Granger causality test within a multivariate cointegration and error-correction framework for the 1996-2014 period. The findings indicate that economic freedom Granger-causes economic growth in the short term, while economic freedom and economic growth Granger-cause corruption in the long term. Furthermore, we employed the forecast error variance decomposition and impulse response function analyses to investigate the dynamic interaction between the variables. The results demonstrate positive unidirectional Granger causality from economic freedom to economic growth in the short term and positive unidirectional Granger causality from economic freedom and economic growth to corruption in the long term in SSA countries.
... We rely on a large number of socio-economic predictor variables for the different corruption indices (e.g. economic growth, level of GDP per capita, unemployment rates, democracy, other institutional variables etc) to help us build the corresponding synthetic units (i.e. the counterfactual corruption outcomes for each Latin-American EITI country). The list of these predictor variables can be found in Appendix 3 and has been compiled based on the empirical literature on the socio-economic determinants of corruption (for some key studies on significant corruption correlates see Ades and Di Telia 1999;Treisman 2000;Jain 2001;Ali and Isse 2003;Brunetti and Weder, 2003;Park 2003;Persson et al., 2003;Serra 2006;Shabbir and Anwar 2007;Pellegrini and Gerlagh 2008;Ata and Arvas 2011;Elbahnasawy and Revier 2012;Tyburski et al., 2020). Similar to other synthetic control studies (Abadie et al., 2015;Ando 2015; Fenton Villar and Papyrakis 2017) we use the pre-intervention outcome variables (i.e. the pre-EITI corruption values) as additional predictors; this helps control for unobservable characteristics (and ensure that any post-EITI differences observed between the synthetic and actual units can be attributed to the intervention). ...
The Extractive Industries Transparency Initiative (EITI), launched in 2002, has been promoted as an international anti-corruption tool. Several empirical evaluations on the effectiveness of the EITI scheme provide average estimates based on cross-country analysis. However, little empirical work has been conducted on individual case studies, especially in the context of Latin America. Our study uses a Synthetic Control Methodology (SCM) to measure the EITI's impact on several measures of corruption in the first five Latin American countries to join the initiative: Colombia, Guatemala, Honduras, Peru, and Trinidad and Tobago. The method allows us to assess the magnitude and statistical significance of the EITI's effect on perceived corruption at each stage of implementation. Our results cast doubt on how decisive the scheme has been in combatting corruption. In the vast majority of cases, participation in the scheme either had no statistically significant effect or even coincided with marginally increased corruption levels (only in very few cases it was associated with temporary minor improvements). Taken together, the results indicate that joining EITI did not lead to a substantial decrease of corruption in any of the countries under scrutiny.
... It increases their political participation as well. The process resists the corrupt activities of politicians, judiciary and law implementing agencies (Ali & Isse, 2002). ...
This study examines the relationship between corruption, income inequality and human resource development by using simultaneous-equation model for a panel of 38 developing countries for the time period 2000-2015. The endogenous variables of human resource development, income inequality and corruption are measured by
human resource development index, control of corruption index and Gini coefficient. The three stage least square results indicate that human resource development in negatively influenced by corruption and income inequality. Income inequality is positively affected by corruption and negatively by human resource development. On
the other hand corruption is negatively influenced by human resource development and positively by income inequality. Among this troika of indicators corruption and income inequality are helping each other to resist human resource development. In the instrumental variables the urbanization, health expenditures and economic freedom positively contribute in human resource development. For developing economies it is needed to tackle the problem of corruption and income inequality for accelerate the human resource development.Article History
... Bribery as an indicator of corruption leads to infrastructural defi ciency (Kenny, 2009); the analysis of corruption effects on investment growth indicates inconsistent fi ndings across regions (Asiedu and Freeman, 2009). Ali and Isse (2003) opined that identifying the determinants of corruption will assist in the formulation of policies to reduce and check the negative effects of corruption. ...
Corruption has a major impact on growth in low-income economies, while ease of doing business has a major impact on growth in developed countries. The study empirically examines the effect of corruption on ease of doing business. The study analyses unbalanced panel data of corruption rank, corruption score, control of corruption, and inflation, together with other economic and financial institutional factors and ease of doing business score for the period of 2004–2017. Results indicate that: corruption rank, inflation, and import have negative and significant effect on ease of doing business; corruption score, control of corruption, lending rate spread, and education (skill level) have positive and significant effect on ease of doing business; gross capital formation and population have insignificant negative effect on ease of doing business; export and gross domestic product have insignificant positive effect on ease of doing business. The random effect model is a consistent and most efficient model, indicating common mean value for ease of doing business for the dataset. The study recommends improved corruption scores, control of corruption, and ranks to encourage ease of doing business through monetary policy and infrastructural facilities.
Objective: The objective of this study is to investigate [insert specific research topic here], with the aim of [briefly Objective: This research aims is to examine the influence of E-Budgeting, Financial Audit Agency (FAA) Opinion on Financial Reports and the Internal Control System on the Corruption Perception Index in the regions of Indonesia. It is hoped that the results of this research can provide any contribution in the form of policies for the management of regional government systems, so the government can prevent or reduce the case of corruption. Theoretical Framework: Corruption can be happen because it is influenced by weak governance, lack of accountability, transparency, and an ineffective internal control system. The solution that can be done to this case is we should increase transparency through e-Budgeting and strengthen the internal control system. This solution is expected to reduce the occurrence of corruption. Method: The analytical method that was used in this research is the multiple regression statistical method. Before being analyzed, firstly the data was tested using the classic assumption test. The regression equation is used to test the proposed hypothesis. The samples/data used in the research are 1) the opinion report data of regional financial originating from various institutions, such as Financial Audit Agency (FAA), 2) the index data of integrity and corruption prevention originating from the Corruption Eradication Commission (KPK), 3) the internal control system data from the Supervisory Agency Finance and Development (FAAP), and 4) the data of Civil Servants that involved of corruption practices in Level I Regions (Provinces) and Level II Regions (districts/cities) in the year 2017 and 2018 that is came from the State Civil Service Agency. Results and Discussion: Based on the data analysis that has been carried out, this research finds that e-Budgeting, the opinion of Financial Audit Agency (FAA), and the internal control system can influence the level of corruption in local government. By implementing e-Budgeting, the level of corruption can be reduced, although there are still gaps in corrupt practices. In the implementation of the Internal Control System, the developments and weaknesses in its independence are still visible. In the opinion of Financial Audit Agency (FAA), the process still appears to be insignificant in reducing corruption, so we need more effective assessment needs to be emphasized. Capital expenditure and regional income can also influence the level of corruption, that's why we should have the stricter supervision. Research Implications: The findings in this research can be used as a basis for policy making in order to improve government governance in Indonesia. The implementing solutions such as e-Budgeting and strengthening internal control systems is expected to reduce the occurrence of corruption and related the states' losses. Originality/Value: This research provides a new contribution to the relationship between the implementation of e-Budgeting, the opinion of Financial Audit Agency (FAA), and the internal control system related to the level of corruption in local government. Measuring the level of corruption through variables such as local government integrity and the number of employees that is involved in corruption cases provides a comprehensive perspective in assessing the impact of proposed solutions.
No country in the world can survive without Foreign Direct Investment
The article focuses on the description and utilization of intangible assets (IA), particularly in industry, as a means of alleviating poverty. The authors examine the experiences of European countries, as well as Ukraine and Kyrgyzstan, and evaluates existing approaches to granting access to intangible assets following international law. Given that only 40% of the global population has access to the Internet and participates in the digital economy, addressing inequality in this realm is a pressing global issue recognized by the G20. Economic inequality, defined in economic theory as the gap between the rich and the poor in terms of income, wealth, education, employment, and living standards within and across countries and regions, will be considered in this article as a disparity in economic well-being indicators. Generally, it is noteworthy that intangible assets (hereinafter referred to as the IA) are crucial, enabling enterprises to develop. They serve as primary indicators of technological progress and enterprise development, reflecting its innovative direction. Consequently, the accounting and auditing of IA play a vital role in industrial enterprises in Ukraine. However, insufficient legislative frameworks in post-Soviet countries, notably Kyrgyzstan, hinder the ability of intangible assets to contribute to poverty alleviation. The income distribution in these countries, which is closely linked to the issue of inequality, is viewed in a positivist theoretical framework from a functional perspective, specifically as the allocation of income among the principal factors of production. Changes in poverty levels in post-Soviet countries can also be attributed to investments in intangible assets that benefit households. Possessing social capital in the form of quality education, health, or land can lead to more favorable earning prospects and can function as intangible capital. One notable characteristic of industry in post-Soviet countries is its urban concentration, which can be attributed to the presence of individuals with more valuable intangible assets in urban areas.
The Sustainable Development Goals are global objectives set by the UN. They cover fundamental issues in development such as poverty, education, economic growth, and climate. Despite growing data across policy dimensions, popular statistical approaches offer limited solutions as these datasets are not big or detailed enough to meet their technical requirements. Complexity Economics and Sustainable Development provides a novel framework to handle these challenging features, suggesting that complexity science, agent-based modelling, and computational social science can overcome these limitations. Building on interdisciplinary socioeconomic theory, it provides a new framework to quantify the link between public expenditure and development while accounting for complex interdependencies and public governance. Accompanied by comprehensive data of worldwide development indicators and open-source code, it provides a detailed construction of the analytic toolkit, familiarising readers with a diverse set of empirical applications and drawing policy implications that are insightful to a diverse readership.
La corrupción representa uno de los mayores problemas a los que se enfrentan los países en la actualidad. Por esto se ha establecido en la agenda 2030, a través del Objetivo de Desarrollo Sostenible (ODS) número 16 "Paz, Justicia e Instituciones Sólidas", el cual establece como una de sus metas "Reducir considerablemente la corrupción y el soborno en todas sus formas". En 2022 México se encontró en el último lugar dentro los 38 miembros de la OCDE en el Índice de la percepción de la corrupción, lo que ha ocasionado que el crecimiento potencial de su economía sea inferior al necesario para alcanzar el nivel de otros países y lograr una competitividad comparable con las otras economías emergentes. La corrupción en México se manifiesta de diferentes maneras, como lo son los sobornos, extorsiones, malversación de fondos, el tráfico de influencias, nepotismo y el desvió de recursos públicos. Lo cual afecta de forma negativa el desarrollo y el crecimiento económico del país, lo que afecta en diferentes indicadores como el PIB per cápita, además genera un ambiente de incertidumbre. Por lo anterior, el presente trabajo tiene como objetivo analizar si existe una relación entre la corrupción y el crecimiento económico, tomando en consideración dos variables: la corrupción, medida a través del Índice de la Percepción de la Corrupción, y el crecimiento económico, medido a través del PIB per cápita.
L'objet de cet article est en embrassant l'approche des institutionnalistes, d'étudier les déterminants de la performance financière des IMF au Sénégal et en Côte d'Ivoire. Notre posture épistémologique est le positivisme avec un raisonnement hypothético-déductif et une démarche quantitative. Les données proviennent de la base de données de la BCEAO et portent sur un échantillon de Dix-neuf (19) IMF durant les périodes de 2016 à 2019. Les résultats du modèle à erreurs composées montrent que la taille, le portefeuille à risque 12-24 mois, la structure du capital, la liquidité, la solvabilité et l'indice Doing Business ont une influence significative sur la performance financière des IMF. Toutefois, les tests de robustesse avec la régression quantile aux trois seuils de distribution (25%, 50% et 75%), montrent que seules la taille de l'IMF, son PAR 12-24 mois et son degré de solvabilité ont un impact significatif sur cette performance financière. La connaissance de ces facteurs pourrait être utile aux managers de ces IMF dans l'adoption de stratégies permettant d'assurer une bonne viabilité financière, gage de leur pérennité et indispensable pour assurer efficacement leur mission sociale.
Abstract
The purpose of this article is to study the determinants of the financial performance of MFIs in Senegal and Côte d'Ivoire, using the institutionalist approach. Our epistemological posture is positivism with a hypothetico-deductive reasoning and a quantitative approach. The data come from the BCEAO database and cover a sample of nineteen (19) MFIs during the periods from 2016 to 2019. The results of the compound error model show that size, 12_24 month portfolio at risk, capital structure, liquidity, and Doing Business index have a significant influence on the financial performance of MFIs. However, robustness tests with quantile regression at the three distribution thresholds (25%, 50%, and 75%) show that only the MFI's size, its 12-24 month PAR, and its creditworthiness have a significant impact on its financial performance. The knowledge of these factors could be useful to the managers of these MFIs in the adoption of strategies to ensure good financial viability, which is a guarantee of their sustainability and indispensable to ensure their social mission effectively.
Este estudio analiza la relación entre corrupción ycrecimiento económico en una muestra de 19 países de AméricaLatina durante el periodo 1998-2018 mediante un análisis dedatos de panel. Se estiman los efectos directos e indirectos dela corrupción en la tasa de crecimiento del PIB. Después decontrolar por una serie de factores económicos y sociopolíticos,los resultados confirman la relación negativa entre corrupción y crecimiento económico.
Development aid does not always positively impact economic growth. Instead, aid may decrease total factor productivity (TFP) and discourage the recipient country's own effort to grow. This study contributes to research on macroeconomic aid transmission channels by using panel data from 51 recipient countries over a 36‐year period and applying panel time‐series techniques. The main aim is to study the aid–productivity relation by analyzing the impact of different forms of aid (grants; loans; and bilateral, multilateral, and sector‐related aid) on productivity while accounting for institutional factors and economic policy. The analysis controls for endogeneity and autocorrelation to ensure consistent and efficient estimates. To examine possible vicious circles often attributed to aid, we run quantile regressions to determine the role of aid across productivity quantiles. We find evidence that aid reduced TFP through grants and bilateral aid from 1972 to 1999 and in all quantiles of the TFP distribution from 1972 to 2009. We also find differences in the impact of sector‐related aid, where aid is harmful in more productive countries.
This study investigates the impact of foreign aid on economic growth in Sierra Leone using cointegration and error correction methodology by Johansen and Juselius (1990). Utilizing secondary data for the period 1970 to 2018, the empirical estimation revealed that foreign aid in Sierra Leone is positively and significantly related to economic growth both in the short run and long run, confirming the importance of the study. The policy implication of the study is that the Sierra Leone government should seek more foreign aid to accelerate economic growth and development.
El problema de la corrupción en Latinoamérica tiene una larga historia con raíces profundas. Los enfoques para tratar la corrupción son diversos, sin embargo, producen mayor interés los casos que, teniendo abundante riqueza natural, no lograron su desarrollo pleno como nación. La Iniciativa para la Transparencia de las Industrias Extractivas (EITI) se ha implementado en el Perú como una propuesta para abordar la corrupción y determinar su aporte en la gobernabilidad del sector extractivo nacional y local en torno a mejores condiciones de transparencia. Este estudio ha utilizado la teoría de la maldición de los recursos y la metodología de control sintético (MCS) con el fin de analizar el efecto de la EITI en los niveles de corrupción en un país líder exportador minero como Perú. La MCS es ideal para muestras cualitativas en estudios de casos en ciencia política, como es la intervención de EITI en Perú. El caso constituye un aporte a la literatura, toda vez que la mayoría de los estudios relativos se los ha realizado en la totalidad de los países, siendo pocos los estudios de casos individuales. Los resultados no se muestran estadísticamente significativos luego de su aplicación en el tratamiento de casos de corrupción del sector extractivo que, dadas sus características profundas, requiere mayor intervención gubernamental y participación de la sociedad civil; es decir, la investigación muestra que la EITI no ha tenido efecto en la reducción de la percepción de corrupción en Perú.
This study investigates the impact of foreign aid on economic growth in Sierra Leone using cointegration and error correction methodology by Johansen and Juselius (1990). Utilizing secondary data for the period 1970 to 2018, the empirical estimation revealed that foreign aid in Sierra Leone is positively and significantly related to economic growth both in the short run and long run, confirming the importance of the study. The policy implication of the study is that the Sierra Leone government should seek more foreign aid to accelerate economic growth and development.
Este artigo objetiva identificar as variáveis podem influenciar em atos de corrupção no cenário nacional, a partir de seus respectivos índices de transparência, considerando a atuação simultânea dos fatores econômico, sociais e jurídicos, sob a ótica da construção civil. Os resultados desta pesquisa possibilitaram verificar quais variáveis são estatisticamente significantes no cenário da corrupção nacional, bem como as variáveis que se referem a este fenômeno no setor da construção civil. A metodologia adotada, consiste na identificação de um modelo de regressão linear múltipla para avaliar e descrever a relação entre as variáveis. Para isso, os dados foram coletados nos sites oficiais do Ministério Público Federal, Câmara Brasileira da Indústria da Construção, Centro de Liderança Pública, Instituto Brasileiro de Geografia e Estatística e Conselho Nacional de Justiça. Em seguida, foi estruturada uma base de dados para a aplicação da análise estatística, que considerou de três hipóteses para serem verificadas. Os resultados obtidos mostraram que, ao serem analisadas simultaneamente, as variáveis relacionadas aos fatores econômicos (PIB da Construção Civil) e sociais (Índice de Educação e Rendimento Per Capita) apresentam valores estatisticamente significativos (p-value<=0,10), enquanto as variáveis associadas aos fatores jurídicos como influenciadores na corrupção, não apresentaram significância estatística (p-value>0,10). De forma conceitual, este estudo busca estruturar entendimentos que possam auxiliar no direcionamento do combate à corrupção no cenário nacional, sugerindo a formulação de políticas públicas para áreas com maior relevância.
This research extends bribery research toward entrepreneurial theory and practice by examining how bribery impacts new venture disbanding in China. Existing research suggests that bribery may enhance firms’ competitive advantage; however, building off of resource-based view and taking into consideration the institutional context in China, the current study proposes that firm bribery activity hurts new ventures by increasing the hazard of venture disbanding. Further, guided by resource dependence theory, this study examines how local economic development and organizing activity moderate the relation between bribery and disbanding. In particular, it is proposed that when local economic development is suffering, or when firms are not engaging in appropriate organizing activities, bribery will lead to higher chance of new venture disbanding. Data from Chinese entrepreneurs support these hypotheses.
L’objectif de cet article consiste à déterminer les causes de la corruption dans le monde arabe pendant la période 2005-2016. Notre échantillon composé de 20 pays a été divisé en deux sous-groupes dont le premier est le plus riche en ressources minières et d’hydrocarbures. Les résultats empiriques montrent pour le groupe un, une relation statistiquement significative entre le manque de démocratie, la rente et la corruption. Pour le groupe deux, ce sont plutôt les variables démocratie, rente et chômage qui ont un impact significatif sur ce fléau. Classification JEL : C23, D72, D73, C36
Corruption has been an epidemic in Africa since the age of colonization. The average level of corruption in Sub-Saharan Africa has been on the rise since. The results support the theory of self-reinforcing corruption in the sense that past corruption levels become an important determinant of current corruption levels due to strategic complementarity. The gap between more corrupt and less corrupt countries stays the same as more corrupt countries turning into more corrupt and less corrupt countries turning into less corrupt, demonstrating that corruption is pervasive in Sub-Saharan Africa. For the institutional determinants, we found that increase in political stability, better regulatory quality and higher level of democracy decreases the level of corruption in Sub-Saharan Africa. For the economic determinants, we found that a higher level of development and higher trade integration decreases the level of corruption and higher gov-ernment expenditure and higher level of natural resources increases the level of corruption in Sub-Saharan Africa. For the socio demographic determinants, we found that higher level of infrastructure decreases the level of corruption while higher share of women in labor force, higher level of population and higher level of urbanization increases corruption in Sub-Saharan Africa.
This paper argues that it is not only level of corruption that affects investment but also the nature of corruption. Corruption regimes that are more predictable—in the sense that those seeking favors from government do obtain those favors—have less negative impact on investment than those that are less predictable. Using the data collected by World Bank in preparing the World Development Report of 1997, we provide empirical support for the conjecture.