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Does corruption matter for economic development? Long run evidence from Bangladesh

Author

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  • Mohammad Habibullah Pulok
  • Moin Uddin Ahmed

Abstract

Purpose - Despite remarkable economic growth in the last two decades, corruption is a “way of life” in Bangladesh. The purpose of this paper is to investigate the long run relationship between economic development and corruption in Bangladesh over 1984-2013. Design/methodology/approach - This study employs autoregressive distributed lag (ARDL) bounds test method to examine the long run relationship or cointegration between corruption and per capita real GDP in Bangladesh using annual time series data. International Country Risk Guide’s (ICRG) corruption index is used as the proxy to measure the degree of corruption. Findings - The results of ARDL bounds test confirm that there exists a long run association between corruption and economic development in Bangladesh. Findings from the long run estimation provide evidence of negative impact of corruption on economic development. The negative value of the error correction term in the short model reinforces the existence of long run relationship. Originality/value - Using multivariate time series approach, this paper contributes to corruption literature by investigating the long run relation between corruption and economic development in Bangladesh. Bangladesh would be able to accelerate its economic development further by reducing the level of corruption through institutional reforms and raising public awareness. Most importantly, government should focus on identifying and abolishing laws and programmes promoting corruption.

Suggested Citation

  • Mohammad Habibullah Pulok & Moin Uddin Ahmed, 2017. "Does corruption matter for economic development? Long run evidence from Bangladesh," International Journal of Social Economics, Emerald Group Publishing, vol. 44(3), pages 350-361, March.
  • Handle: RePEc:eme:ijsepp:ijse-05-2015-0132
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    Cited by:

    1. Najla Shariff Omar Al Baiti & Navaz Naghavi & Benjamin Chan Yin Fah, 2017. "The Impact of Environmental Regulations, Corruption and Economic Freedom on Economic Growth: Empirical Evidence from China," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 9(11), pages 92-99, November.

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