Does corruption foster growth in Bangladesh?
Purpose – The purpose of the paper is to unveil the relationship between corruption and economic growth in Bangladesh. Design/methodology/approach – The paper is designed to combine both theory and empirical work. Findings – Bangladesh poses a positive relation between corruption and growth. This relationship has been significant since 1977 when Bangladesh embarked on a market economy and unleashed private investment, but failed to implement corresponding reforms in bureaucracy and major public utilities. As a result, consumers with rising income and producers with thriving business opportunities confronted public regulatory bodies for utilities and permits, and indulged in increasing corruption. Thus, both corruption and economic growth increased with the pace of privatisation and the market economy in Bangladesh. Hence, a positive association between corruption and growth, though spurious and co-incidental, becomes apparent. Research limitations/implications – A bigger sample size for survey can be covered in the future. Practical implications – While corruption does not foster growth, it greases the wheels of commerce in Bangladesh's regulation-heavy systems that would otherwise impede businesses. Social implications – It can be argued that Bangladesh has the potentials to make growth performance even brighter if corruption can be further reduced through comprehensive liberalisation and bureaucratic reform. Originality/value – Conventional wisdom suggests that corruption impedes economic growth. But this relationship is not that simple and straight forward in Bangladesh as it initially appears to be. Other institutional factors must be addressed before spurring growth in the country. This finding has implications to the development policymakers of Bangladesh or other emerging economies that experience both high growth and high corruption.
Volume (Year): 9 (2010)
Issue (Month): 3 (July)
|Contact details of provider:|| Web page: http://www.emeraldinsight.com|
|Order Information:|| Postal: Emerald Group Publishing, Howard House, Wagon Lane, Bingley, BD16 1WA, UK|
Web: http://www.emeraldinsight.com/ijdi.htm Email:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Aidt, T. & Dutta, J. & Vania Sena, 2005. "Growth, Governance and Corruption in the Presence of Threshold Effects: Theory and Evidence," Cambridge Working Papers in Economics 0540, Faculty of Economics, University of Cambridge.
- Neeman Zvika & Paserman M. Daniele & Simhon Avi, 2008.
"Corruption and Openness,"
The B.E. Journal of Economic Analysis & Policy,
De Gruyter, vol. 8(1), pages 1-40, December.
- Zvika Neeman & Daniele Paserman & Avi Simhon, 2006. "Corruption and Openness," 2006 Meeting Papers 164, Society for Economic Dynamics.
- Zvika Neeman & M. Daniele Paserman & Avi Simhon, 2004. "Corruption and Openness," Discussion Paper Series dp353, The Federmann Center for the Study of Rationality, the Hebrew University, Jerusalem.
- Neeman, Zvika & Paserman, Daniele & Simhon, Avi, 2003. "Corruption And Openness," Discussion Papers 14977, Hebrew University of Jerusalem, Department of Agricultural Economics and Management.
- Neeman, Zvika & Paserman, M. Daniele & Simhon, Avi, 2003. "Corruption and Openness," CEPR Discussion Papers 4057, C.E.P.R. Discussion Papers.
- Fisman, Raymond & Svensson, Jakob, 2000.
"Are corruption and taxation really harmful to growth? - firm-level evidence,"
Policy Research Working Paper Series
2485, The World Bank.
- Fisman, Raymond & Svensson, Jakob, 2007. "Are corruption and taxation really harmful to growth? Firm level evidence," Journal of Development Economics, Elsevier, vol. 83(1), pages 63-75, May.
- Paul Romer, 1989.
"Endogenous Technological Change,"
NBER Working Papers
3210, National Bureau of Economic Research, Inc.
- Paolo Mauro, 1995. "Corruption and Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 110(3), pages 681-712.
- Lorenzo Pellegrini & Reyer Gerlagh, 2004. "Corruption's Effect on Growth and its Transmission Channels," Kyklos, Wiley Blackwell, vol. 57(3), pages 429-456, 08.
- Romer, Paul M, 1986.
"Increasing Returns and Long-run Growth,"
Journal of Political Economy,
University of Chicago Press, vol. 94(5), pages 1002-37, October.
- Rahman, Aminur & Kisunko, Gregory & Kapoor, Kapil, 2000. "Estimating the effects of corruption - implications for Bangladesh," Policy Research Working Paper Series 2479, The World Bank.
- Philip Shaw & Marina‐Selini Katsaiti & Marius Jurgilas, 2011.
"Corruption And Growth Under Weak Identification,"
Western Economic Association International, vol. 49(1), pages 264-275, 01.
- Mo, Pak Hung, 2001. "Corruption and Economic Growth," Journal of Comparative Economics, Elsevier, vol. 29(1), pages 66-79, March.
- Nobuo Akai & Yusaku Horiuchi & Masayo Sakata, 2005.
"Short-run and Long-run Effects of Corruption on Economic Growth: Evidence from State-Level Cross-Section Data for the United States,"
International and Development Economics Working Papers
idec05-5, International and Development Economics.
- Nobuo Akai & Yusaku Horiuchi & Masayo Sakata, 2005. "Short-run and Long-run Effects of Corruption on Economic Growth: Evidence from State-Level Cross-Section Data for the United States," CIRJE F-Series CIRJE-F-348, CIRJE, Faculty of Economics, University of Tokyo.
- Bigsten, Arne & Moene, Karl Ove, 1996. "Growth and Rent Dissipation: The Case of Kenya," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 5(2), pages 177-98, June.
- Pierre-Guillaume Méon & Laurent Weill, 2004. "Does corruption hamper efficiency? A frontier analysis," ULB Institutional Repository 2013/8382, ULB -- Universite Libre de Bruxelles.
- K Blackburn & N Bose & M E Haque, 2003.
"The Incidence and Persistence of Corruption in Economic Development,"
Centre for Growth and Business Cycle Research Discussion Paper Series
34, Economics, The Univeristy of Manchester.
- Blackburn, Keith & Bose, Niloy & Emranul Haque, M., 2006. "The incidence and persistence of corruption in economic development," Journal of Economic Dynamics and Control, Elsevier, vol. 30(12), pages 2447-2467, December.
- Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
When requesting a correction, please mention this item's handle: RePEc:eme:ijdipp:v:9:y:2010:i:3:p:246-262. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Virginia Chapman)
If references are entirely missing, you can add them using this form.