How corruption affects persistent capital flows
Corruption is known to reduce the ratio of investment to GDP. This study breaks down investment into domestic savings and net capital inflows. A significant impact of corruption exists only for the latter variable because the first variable is distorted by general equilibrium repercussions. An increase in Colombia’s level of integrity to that of the United Kingdom is found to increase net annual capital inflows by 3 percent of GDP. Decomposing this impact reveals that bureaucratic quality, civil liberty and government stability are irrelevant, but that a country’s law and order tradition is a crucial sub-component for attracting capital. Copyright Springer-Verlag Berlin/Heidelberg 2003
Volume (Year): 4 (2003)
Issue (Month): 3 (November)
|Contact details of provider:|| Web page: http://link.springer.de/link/service/journals/10101/index.htm|
|Order Information:||Web: http://link.springer.de/orders.htm|
When requesting a correction, please mention this item's handle: RePEc:spr:ecogov:v:4:y:2003:i:3:p:229-243. 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: (Sonal Shukla)or (Christopher F Baum)
If references are entirely missing, you can add them using this form.