Corruption, Poverty, and Economic Growth (Causality Studies among Asean Countries)

Zuhairan Y. Yunan, Ayu Andini

Abstract


Corruption has causal impacts on economic and social development indicators. The discussion on this issue is widely interesting among economists, especially in Southeast Asia Countries which have been considered that has as a corrupt governance system. The objective of this study is to analyze the causality of corruption, poverty, and economic growth among ASEAN countries between 2002 and 2015. Four countries have been choosen since they have the same characteristics in term of the indicators presented. Granger causality test and Random Effect Model have been used to answer problem question of this paper. The results show that statistically, both of economic development indicators have a significant effect to corruption, while each indicator has a different direction. Meanwhile, causality test presents a tendency in Philippines. Hence, it is only economic growth is affecting corruption significantly and it occurs between poverty and corruption as well. In Thailand, different result shows that the causality happenes poverty and economic growth indicators. However, Indonesia and Malaysia have no causality at all.


Keywords


corruption, poverty, economic growth, causality test, random effect model.

Full Text:

PDF

References


Acemoglu, D. and Verdier, T. (1998) ‘Property rights, corruption and the allocation of talent: a general equilibrium approach’, The Economic Journal, 108(450), pp. 1381–1403. Available at: http://www.jstor.org/stable/2566185.

Adelman, I. (1999) Fallacies in development theory and their implications for policy. 887. California.

Blackburn, K., Bose, N. and Haque, M. E. (2006) ‘The incidence and persistence of corruption in economic development’, Journal of Economic Dynamics & Control, 30, pp. 2447–2467. doi: 10.1016/j.jedc.2005.07.007.

Blackburn, K. and Powell, J. (2011) ‘Corruption , inflation and growth’, Economics Letters. Elsevier B.V., 113(3), pp. 225–227. doi: 10.1016/j.econlet.2011.06.015.

Brown, S. F. and Shackman, J. (2007) ‘Corruption and Related Socioeconomic Factors: A Time Series Study’, KYKLOS, 60(3), pp. 319–347.

Chetwynd, E., Chetwynd, F. and Spector, B. (2003) Corruption and poverty : a review of recent literature. Washington.

Colombatto, E. (2003) ‘Why is corruption tolerated?’, The Review of Austrian Economics, 16(4), pp. 363–379.

Cuervo-cazurra, A. (2008) ‘Better the devil you don ’ t know : Types of corruption and FDI in transition economies ☆’, Journal of International Manage-ment, 14, pp. 12–27. doi: 10.1016/ j.intman.2007.02.003.

Dridi, M. (2013) ‘Corruption and Economic Growth : The Transmission Channels’, Journal of Business Studies Quarterly, 4(4), pp. 121–152. Available at: http://jbsq.org/wp-content/uploads/2013/06/June_2013_9.pdf.

Dzhumashev, R. (2014) ‘Corruption and growth: The role of governance, public spending, and economic development’, Economic Modelling, 37, pp. 202–215. doi: 10.1016/j.econmod.2013.11.007.

Elbahnasawy, N. G. and Revier, C. F. (2012) ‘The Determinants of Corruption: Cross-Country-Panel-Data Analysis’, The Developing Economies, 50(4), pp. 311–333. doi: 10.1111/j.1746-1049.2012.00177.x.

Evrensel, A. Y. (2010) ‘Corruption , growth , and growth volatility’, International Review of Economics and Finance, 19, pp. 501–514. doi: 10.1016/ j.iref.2009.08.002.

Glaeser, E. L. and Saks, R. E. (2004) Corruption in America. 10821. Massachusetts Avenue, Cambridge. Available at: http://www.nber.org/papers/ w10821%0ANATIONAL.

Guriev, S. (2004) ‘Red tape and corruption’, Journal of Development Economics, 73, pp. 489–504. doi: 10.1016/j.jdeveco.2003.06.001.

Gyimah-brempong, K. (2002) ‘Corruption, economic growth, and income inequality in Africa’, Econo-mics of Governance, 3, pp. 183–209.

Huang, C.-J. (2015) ‘Is corruption bad for economic growth? evidence from Asia-Pacific countries’, North American Journal of Economics and Finance. doi: http://dx.doi.org/10.1016/j.najef.2015.10.013.

Huntington, S. P. (1968) Political Order in Changing Societies. 7th edn. London: Yale University Press.

Johnson, N. D., Lafountain, C. L. and Yamarik, S. (2010) ‘Corruption is bad for growth ( even in the United States )’, Public Choice, p. 17. doi: 10.1007/s11127-010-9634-5.

Kanbur, R. and Squire, L. (1999) The evolution of thinking about poverty: exploring the interactions. 99–24. New York. Available at: http://ageconsearch.umn.edu/record/127697/files/Cornell_Dyson_wp9924.pdf.

Krueger, A. O. (1974) ‘The political economy of the rent-seeking society’, American Economic Association, 64(3), pp. 291–303.

Lambsdorff, J. G. (2007) The institutional economics of corruption and reform: theory, evidence, and policy. 1st edn. New York: Cambridge University Press. Available at: www.cambridge.org/9780521872751.

Lui, F. (1985) ‘An Equilibrium Queuing Model of Bribery’, Political Economy. JSTOR, 93, pp. 760–781. doi: 10.1086/261329.

Mathew, R. E. et al. (2013) ‘Analysis of corruption and economic growth in Nigeria’, Afro Asian Journal of Social Sciences, 4(4.2), pp. 1–19.

Mo, P. H. (2001) ‘Corruption and Economic Growth’, Journal of Comparative Economics, 29, pp. 66–79. doi: 10.1006/jcec.2000.1703.

N’zune, F. F. and N’guessan, C. J. F. (2006) The causality between corruption, poverty, and growth: a panel data analysis. 1. Ottawa.

Ndikumana, L. (2006) Corruption and pro-poor growth outcomes: evidence and lesson for African countries. 120. University of Massachusetts Amherst.

Negin, V., Rashid, Z. A. and Nikopour, H. (2010) The causal relationship between corruption and poverty: a panel data analysis. 24871. Munich. Available at: https://mpra.ub.uni-muenchen.de/24871/.

Nwanko, O. (2014) ‘Impact of Corruption on Economic Growth in Nigeria’, Mediterranean Journal of Social Sciences, 5(6), pp. 41–46. doi: 10.5901/ mjss.2014.v5n6p41.

Nwankwo, R. N. (2013) ‘Official corruption and poverty reduction in Nigeria: a critical assesment (2003-2010)’, International Journal of Arts & Sciences, 6(2), pp. 305–329.

Paldam, M. (2001) ‘Corruption and religion adding to the economic model’, International Review for Social Sciences (KYKLOS), 54(April), pp. 383–413. doi: 10.1111/1467-6435.00160.

Paldam, M. (2002) ‘The cross-country pattern of corruption: economics, culture and the seesaw dynamics’, European Journal of Political Economy, 18, pp. 215–240. doi: 10.1016/S0176-2680(02)00078-2.

Pulok, M. H. (2011) The impact of corruption on economic development of Bangladesh: evidence on the basis of an extended solow model. 28755. Munich. Available at: https://mpra.ub.uni-muenchen.de/28755/.

Rehman, H. U. and Naveed, A. (2007) ‘Determinants of Corruption and its Relation to GDP: (A Panel study)’, Journal of Political Studies.

Shera, A., Dosti, B. and Grabova, P. (2014) ‘Corruption impact on economic growth: an empirical analysis’, Journal of Economic Development, Management, IT, Finance and Marketing, 6(2), pp. 57–77.

Shleifer, A. and Vishny, R. W. (1993) ‘Corruption’, The Quarterly Journal of Economics, 108(3), pp. 599–617.

Svensson, J. (2005) ‘Eight Questions about Corruption’, Journal of Economic Perspectives, 19(3), pp. 19–42.

Swaleheen, M. (2011) ‘Economic growth with endoge-nous corruption: an empirical study’, Public Choice, 146, pp. 23–41. doi: 10.1007/s11127-009-9581-1.

Tanzi, V. and Davoodi, H. (1997) Corruption, Public Investment, and Growth. WP/97/139.

Treisman, D. (2000) ‘The causes of corruption : a cross-national study’, Journal of Public Economics, 76, pp. 399–457. doi: doi.org/10.1016/S0047-2727(99)00092-4.

Waluyo, J. (2010) ‘Analysis of causality between corruption, economic growth, and poverty: a cross-country study, Economic Bulletin, 8(2), pp. 159–169.

Wright, A. S. and Craigwell, R. (2013) ‘Economic growth and corruption in developing countries: evidence from linear and non-linear panel causality tests’, Business, Finance & Economics in Emerging Economies, 8(2), pp. 21–43.

Yun, C. H. et al. (2015) The relationship between corruption and economic growth in Malaysia. Malaysia.




DOI: https://doi.org/10.15294/jejak.v11i2.16061

Refbacks

  • There are currently no refbacks.




Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.