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Institutions’ Impact On The Corruption–Growth Nexus: Nonlinearities And Transmission Channels

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  • Marakbi, Réda
  • Turcu, Camélia
  • Villieu, Patrick

Abstract

We analyze the channels through which institutional quality can impact the corruption–growth nexus. To do this, we develop an endogenous growth model and test its implications empirically, through panel data models using GMM and PSTR settings. Our sample consists of 136 developed and developing countries analyzed over the period 1984–2015. We show, both theoretically and empirically, that (i) the corruption–growth relation can be subject to nonlinearities highly influenced by countries’ institutional development; and (ii) private investment and public spending are two main channels through which institutional quality affects, positively or negatively, the relation between corruption and economic growth.

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  • Marakbi, Réda & Turcu, Camélia & Villieu, Patrick, 2021. "Institutions’ Impact On The Corruption–Growth Nexus: Nonlinearities And Transmission Channels," Macroeconomic Dynamics, Cambridge University Press, vol. 25(1), pages 257-279, January.
    • Handle: RePEc:cup:macdyn:v:25:y:2021:i:1:p:257-279_13
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    Cited by:

    1. Krifa-Schneider, Hadjila & Matei, Iuliana & Sattar, Abdul, 2022. "FDI, corruption and financial development around the world: A panel non-linear approach," Economic Modelling, Elsevier, vol. 110(C).
    2. Glawe, Linda & Wagner, Helmut, 2022. "Is schooling the same as learning? – The impact of the learning-adjusted years of schooling on growth in a dynamic panel data framework," World Development, Elsevier, vol. 151(C).

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