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The Causal Relationship between Corruption and Poverty: A Panel Data Analysis

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  • Negin, Vahideh
  • Abd Rashid, Zakariah
  • Nikopour, Hesam

Abstract

Most of the studies which have investigated the link between corruption and poverty may draw conclusions on causality in the form of models that only show correlation. This study is set out to investigate the Granger causal relationship between corruption and poverty. It uses dynamic panel system GMM estimators, focuses on capability poverty using human poverty index (HPI) and is based on a sample of 97 developing countries during 1997-2006. The empirical findings reveal that corruption and poverty go together, with bidirectional causality.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 24871.

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Date of creation: 25 Jun 2010
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Handle: RePEc:pra:mprapa:24871

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Keywords: Corruption; Poverty; Panel Data Analysis;

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  1. Arellano, Manuel & Bond, Stephen, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 58(2), pages 277-97, April.
  2. Anand V. Swamy & Stephen Knack & Young Lee & Omar Azfar, 2000. "Gender and Corruption," Department of Economics Working Papers 2000-10, Department of Economics, Williams College.
  3. Kaufmann, Daniel & Kraay, Aart & Zoido-Lobaton, Pablo, 1999. "Aggregating governance indicators," Policy Research Working Paper Series 2195, The World Bank.
  4. LĂ©once Ndikumana, 2006. "Corruption and Pro-Poor Growth Outcomes: Evidence and Lessons for African Countries," Working Papers wp120, Political Economy Research Institute, University of Massachusetts at Amherst.
  5. Ravallion, Martin, 2002. "On the urbanization of poverty," Journal of Development Economics, Elsevier, vol. 68(2), pages 435-442, August.
  6. Vito Tanzi, 1998. "Corruption Around the World," IMF Working Papers 98/63, International Monetary Fund.
  7. Sanjeev Gupta, 1998. "Does Corruption Affect Income Inequality and Poverty?," IMF Working Papers 98/76, International Monetary Fund.
  8. Sanjeev Gupta & Hamid Davoodi & Rosa Alonso-Terme, 2002. "Does corruption affect income inequality and poverty?," Economics of Governance, Springer, vol. 3(1), pages 23-45, 03.
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Cited by:
  1. Kodila Tedika, Oasis, 2012. "Consequences De La Corruption : Panorama Empirique
    [Consequences of Corruption : Empirical survey]
    ," MPRA Paper 41482, University Library of Munich, Germany.

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