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Corruption, Military Spending and Growth

Author

Listed:
  • Giorgio d'Agostino

    (Università degli Studi di Roma and UWE, Bristol)

  • Luca Pieroni

    (University of Perugia and UWE, Bristol)

  • J Paul Dunne

    (University of the West of England and University of Cape Town)

Abstract

This paper considers the complementary effect of corruption and military spending on economic growth, analyzing both the direct impact of public spending and effect of allocating resources between categories of public spending within the framework of an endogenous growth model. The non-linearities that emerge from are the result of the links between the components of public spending, corruption and economic growth. The main findings of the empirical analysis confirm the expectation that corruption and military burden lower the growth rate of GDP per capita. They also suggest that when the the complementarity effect between military spending and corruption is omitted, as in most studies, the impact of military burden on economic performance is underestimated.

Suggested Citation

  • Giorgio d'Agostino & Luca Pieroni & J Paul Dunne, 2011. "Corruption, Military Spending and Growth," Working Papers 1103, Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol.
    • Handle: RePEc:uwe:wpaper:1103
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    References listed on IDEAS

    as
    1. Clara Delavallade, 2007. "Why do North African firms involve in corruption?," Documents de travail du Centre d'Economie de la Sorbonne v07002, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    2. Aizenman, Joshua & Glick, Reuven, 2003. "Military Expenditure, Threats, and Growth," Santa Cruz Department of Economics, Working Paper Series qt41r4105h, Department of Economics, UC Santa Cruz.
    3. Joshua Aizenman & Reuven Glick, 2006. "Military expenditure, threats, and growth," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 15(2), pages 129-155.
    4. Axel Dreher & Thomas Herzfeld, 2005. "The Economic Costs of Corruption: A Survey and New Evidence," Public Economics 0506001, University Library of Munich, Germany.
    5. Vito Tanzi, 1998. "Corruption Around the World: Causes, Consequences, Scope, and Cures," IMF Staff Papers, Palgrave Macmillan, vol. 45(4), pages 559-594, December.
    6. Léonce Ndikumana & Mina Baliamoune-Lutz, 2008. "Corruption and Growth: Exploring the Investment Channel," UMASS Amherst Economics Working Papers 2008-08, University of Massachusetts Amherst, Department of Economics.
    7. Mr. Vito Tanzi, 1998. "Corruption Around the World: Causes, Consequences, Scope, and Cures," IMF Working Papers 1998/063, International Monetary Fund.
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    More about this item

    Keywords

    corruption; military spending; development economics;
    All these keywords.

    JEL classification:

    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption

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