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Allocating budget in developing countries, the need to fight corruption: evidence from Sub-Saharan African countries

Author

Listed:
  • Porto Bazie

    (Thomas SANKARA University)

  • Noël Thiombiano

    (Thomas SANKARA University)

  • Eugénie. W. H. Maiga

    (Norbert ZONGO University)

Abstract

This paper highlights the need to fight corruption in developing economies to ensure a better allocation of public resources in a context of institutional failure with the discretionary power of budgetary authorities. The study uses a panel of 48 Sub-Saharan African countries by combining several databases (WDI, WGI, SPEED BASE DATA and PWT), estimate by generalized moment method in system, the bias-corrected estimation linear dynamic panel data [6] and the type of error correction (Driscoll–Kraay). The results indicate that the phenomenon of corruption in the form of rent capture has two effects on public resources. One effect is linked to the level of public spending and the other to the distribution of public resources. Thus, corruption leads to an increase in the overall level of public spending. Corruption reduces spending on education, mining and communications, but increases spending on the military, health and transport. The study recommends that political leaders in developing countries strengthen and rigorously enforce anti-corruption laws, and raise public awareness of the underground economy.

Suggested Citation

  • Porto Bazie & Noël Thiombiano & Eugénie. W. H. Maiga, 2024. "Allocating budget in developing countries, the need to fight corruption: evidence from Sub-Saharan African countries," Future Business Journal, Springer, vol. 10(1), pages 1-12, December.
    • Handle: RePEc:spr:futbus:v:10:y:2024:i:1:d:10.1186_s43093-023-00289-y
    DOI: 10.1186/s43093-023-00289-y
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    More about this item

    Keywords

    Public investment; Corruption; GMM in system; Africa;
    All these keywords.

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • N37 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Africa; Oceania

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