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The relationship between corruption and public investment at the municipalities’ level in Indonesia

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  • Dartanto, Teguh

Abstract

This research is conducted to quantitatively measure the relationship between corruption and public investment at municipalities’ level in Indonesia. According to Nash Equilibrium derived from mixed strategies, the relationship between corruption and public investment can be both positive and negative depending on the level of the corruption Index. Moreover, the econometric estimations from cross section data and pooled data consistently confirm that the relationship between corruption and public investment is in non linear quadratic form. It was found that the public investment reaches the lowest level when the corruption index ranges from 4.42-4.64.

Suggested Citation

  • Dartanto, Teguh, 2010. "The relationship between corruption and public investment at the municipalities’ level in Indonesia," MPRA Paper 23736, University Library of Munich, Germany, revised Apr 2010.
    • Handle: RePEc:pra:mprapa:23736
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    File URL: https://mpra.ub.uni-muenchen.de/23736/1/MPRA_paper_23736.pdf
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    References listed on IDEAS

    as
    1. Gary S. Becker, 1974. "Crime and Punishment: An Economic Approach," NBER Chapters, in: Essays in the Economics of Crime and Punishment, pages 1-54, National Bureau of Economic Research, Inc.
    2. Rose-Ackerman, Susan, 1975. "The economics of corruption," Journal of Public Economics, Elsevier, vol. 4(2), pages 187-203, February.
    3. Macrae, John, 1982. "Underdevelopment and the economics of corruption: A game theory approach," World Development, Elsevier, vol. 10(8), pages 677-687, August.
    4. Mr. Vito Tanzi & Mr. Hamid R Davoodi, 1997. "Corruption, Public Investment, and Growth," IMF Working Papers 1997/139, International Monetary Fund.
    5. Paolo Mauro, 1995. "Corruption and Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(3), pages 681-712.
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    Cited by:

    1. Nguyen, Ngoc Anh & Nguyen, Ngoc-Minh & Tran-Nam, Binh, 2014. "Corruption and economic growth, with a focus on Vietnam," MPRA Paper 84728, University Library of Munich, Germany, revised 2015.

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    More about this item

    Keywords

    Corruption; Public Investment; Game Theory; Regional Development;
    All these keywords.

    JEL classification:

    • H0 - Public Economics - - General
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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