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Dynamic interconnections between corruption and economic growth

Author

Listed:
  • Helder Rojas

    (Department of Mathematics, Imperial College London)

  • Macavilca Tello Bartolome

    (School of Statistical Engineering, National University of Engineering)

  • Kevin Fernandez

    (Institute of Geosciences, University of São Paulo)

  • Oscar Cutipa-Luque

    (School of Statistical Engineering, National University of Engineering)

Abstract

This study examines the dynamic relationship between corruption and economic growth, focusing on the transmission mechanisms and contagion channels through which shocks in one country influence economic performance and corruption perceptions in others. Using data from Gross Domestic Product (GDP) and the Corruption Perception Index (CPI), we employ a coupled vector autoregressive model to capture the interactions between these variables. The results show that corruption and economic growth are interdependent across countries, with significant spillovers through trade and investment channels. By integrating graph theory and Granger causality, we build a network of interconnections that illustrates how corruption dynamics in one country can influence others, contributing to the "grease vs. sand" debate. These findings provide insights for designing policies that promote transparency and sustainable economic development.

Suggested Citation

  • Helder Rojas & Macavilca Tello Bartolome & Kevin Fernandez & Oscar Cutipa-Luque, 2025. "Dynamic interconnections between corruption and economic growth," Economics Bulletin, AccessEcon, vol. 45(3), pages 1485-1503.
    • Handle: RePEc:ebl:ecbull:eb-25-00232
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    JEL classification:

    • C4 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations

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