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The impact of corruption on economic growth, a bootstrapping analysis

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  • Pedro Cosme da Costa Vieira

    (Faculdade de Economia do Porto)

Abstract

In this paper we evaluate the impact of corruption in economic growth and if in less developed countries the hypothesis "greasing the wheels” is valid. Using an unbalanced panel data with 2907 observations from 174 countries and 23 years between 1995 and 2017 (data from Transparency International and World Bank), we estimate using bootstrapping that the impact of corruption on growth is negative (an estimate of 0.025pp per CPI point) and that the hypothesis "greasing the wheels” is not supported in the data. Our results are in accordance with the literature but are more robust because our database has much more observations.

Suggested Citation

  • Pedro Cosme da Costa Vieira, 2018. "The impact of corruption on economic growth, a bootstrapping analysis," FEP Working Papers 612, Universidade do Porto, Faculdade de Economia do Porto.
    • Handle: RePEc:por:fepwps:612
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    File URL: http://www.fep.up.pt/investigacao/workingpapers/wp612.pdf
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    References listed on IDEAS

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    1. Thierry Verdier & Daron Acemoglu, 2000. "The Choice between Market Failures and Corruption," American Economic Review, American Economic Association, vol. 90(1), pages 194-211, March.
    2. Lambsdorff,Johann Graf, 2007. "The Institutional Economics of Corruption and Reform," Cambridge Books, Cambridge University Press, number 9780521872751, January.
    3. Paolo Mauro, 1995. "Corruption and Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(3), pages 681-712.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Corruption; Economic Growth; Panel data; Bootstrapping;
    All these keywords.

    JEL classification:

    • C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption

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