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External debt, corruption control, and economic prosperity in the SADC region

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  • Gisele Mah
  • Gildas Dohba Dinga

Abstract

This study investigates the impact of external debt and corruption control on the economic prosperity of Southern African Development Community (SADC) countries, using the Legatum Prosperity Index as a comprehensive measure encompassing nine dimensions. The study employs various estimation techniques, including Driscoll-Kraay, instrumental variables, quantile-on-quantile regressions, and the Granger causality test. The findings indicate that external debt positively influences economic prosperity in the SADC region. Additionally, effective corruption control enhances this prosperity. Causality tests reveal a bidirectional relationship between external debt, economic prosperity, and corruption control. The study recommends strengthening anti-corruption agencies, initiating open data policies, implementing market reforms, and pursuing fiscal consolidation to promote debt sustainability and foster prosperity within the SADC region.

Suggested Citation

  • Gisele Mah & Gildas Dohba Dinga, 2025. "External debt, corruption control, and economic prosperity in the SADC region," Modern Finance, Modern Finance Institute, vol. 3(2), pages 58-74.
    • Handle: RePEc:bdy:modfin:v:3:y:2025:i:2:p:58-74:id:247
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    References listed on IDEAS

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    1. António Afonso & Eduardo Sá Fortes Leitão Rodrigues, 2022. "Corruption and economic growth: does the size of the government matter?," Economic Change and Restructuring, Springer, vol. 55(2), pages 543-576, May.
    2. Budsaratragoon, Pornanong & Jitmaneeroj, Boonlert, 2021. "Reform priorities for prosperity of nations: The Legatum Index," Journal of Policy Modeling, Elsevier, vol. 43(3), pages 657-672.
    3. Mohamed Ali Trabelsi, 2024. "The impact of corruption on economic growth: a nonlinear evidence," Journal of Social and Economic Development, Springer;Institute for Social and Economic Change, vol. 26(3), pages 953-962, December.
    4. Devesh KAPUR, 2003. "Do As I Say Not As I Do: A Critique Of G-7 Proposals On Reforming The Multilateral Development Banks," G-24 Discussion Papers 20, United Nations Conference on Trade and Development.
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