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Curbing corruption for higher growth: The importance of persistence

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  • Swaleheen, Mushfiq

Abstract

There is a view in the literature that curbing corruption is concurrently growth augmenting. We present evidence that such is not always the case: independent of its indirect effects, a drop in corruption is growth augmenting only if there has been a persistent decline in corruption in the past.

Suggested Citation

  • Swaleheen, Mushfiq, 2012. "Curbing corruption for higher growth: The importance of persistence," Economics Letters, Elsevier, vol. 116(2), pages 255-257.
    • Handle: RePEc:eee:ecolet:v:116:y:2012:i:2:p:255-257
    DOI: 10.1016/j.econlet.2012.03.011
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    References listed on IDEAS

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    1. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
    2. Lorenzo Pellegrini & Reyer Gerlagh, 2004. "Corruption's Effect on Growth and its Transmission Channels," Kyklos, Wiley Blackwell, vol. 57(3), pages 429-456, August.
    3. Mo, Pak Hung, 2001. "Corruption and Economic Growth," Journal of Comparative Economics, Elsevier, vol. 29(1), pages 66-79, March.
    4. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    5. Pierre-Guillaume Méon & Khalid Sekkat, 2005. "Does corruption grease or sand the wheels of growth?," Public Choice, Springer, vol. 122(1), pages 69-97, January.
    6. Paolo Mauro, 1995. "Corruption and Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(3), pages 681-712.
    7. Windmeijer, Frank, 2005. "A finite sample correction for the variance of linear efficient two-step GMM estimators," Journal of Econometrics, Elsevier, vol. 126(1), pages 25-51, May.
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    Cited by:

    1. G. C. Montes & P. C. Paschoal, 2016. "Corruption: what are the effects on government effectiveness? Empirical evidence considering developed and developing countries," Applied Economics Letters, Taylor & Francis Journals, vol. 23(2), pages 146-150, February.
    2. Michael Polemis, 2019. "Is the effect of corruption on entrepreneurial activity nonmonotonic? A semi-parametric panel data analysis," Economics Bulletin, AccessEcon, vol. 39(4), pages 2976-2989.

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    More about this item

    Keywords

    Corruption; Growth; Generalized method of moments (GMM);
    All these keywords.

    JEL classification:

    • H8 - Public Economics - - Miscellaneous Issues
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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