IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this paper

Corruption and economic growth: A meta-analysis of the evidence on low-income countries and beyond

  • Ugur, Mehmet
  • Dasgupta, Nandini

Corruption is a symptom and outcome of institutional deficiency, with potentially adverse effects on economic growth. This paper aims to provide a synthesis of the existing evidence on the relationship between corruption and economic growth - controlling for effect type, data sources, and country groupings. Using 32 key search terms and 43 low-income country names, we searched in 20 electronic databases and obtained 1,002 studies. Initial screening on the basis of PIOS (Population-Independent Variable-Outcome-Study Design) criteria and critical evaluation on the basis VRA (Validity-Reliability-Applicability) criteria led to inclusion of 115 studies for analysis. We conduct a meta-analysis of the empirical findings in 72 empirical studies, using fixed-effect and random-effect weighted means and testing for significance through precision-effect tests (PETs). Our findings indicate that corruption has a negative effect on per-capita GDP growth overall. We also report that corruption is relatively more detrimental in mixed countries as opposed to low-income countries only and that indirect effects of corruption on growth (through the human capital and public finance channels) are larger than its direct effects.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: https://mpra.ub.uni-muenchen.de/31226/1/MPRA_paper_31226.pdf
File Function: original version
Download Restriction: no

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 31226.

as
in new window

Length:
Date of creation: 20 Apr 2011
Date of revision: 31 May 2011
Handle: RePEc:pra:mprapa:31226
Contact details of provider: Postal:
Ludwigstraße 33, D-80539 Munich, Germany

Phone: +49-(0)89-2180-2459
Fax: +49-(0)89-2180-992459
Web page: https://mpra.ub.uni-muenchen.de

More information through EDIRC

References listed on IDEAS
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.:

as in new window
  1. Mushfiq us Swaleheen, 2007. "Corruption and Investment Choices: A Panel Data Study," Kyklos, Wiley Blackwell, vol. 60(4), pages 601-616, November.
  2. Dzhumashev, Ratbek, 2009. "Is there a direct effect of corruption on growth?," MPRA Paper 18489, University Library of Munich, Germany.
  3. Clausen, Bianca & Kraay, Aart & Nyiri, Zsolt, 2009. "Corruption and confidence in public institutions : evidence from a global survey," Policy Research Working Paper Series 5157, The World Bank.
  4. Mina Baliamoune-Lutz, 2009. "Human Well-Being Effects Of Institutions And Social Capital," Contemporary Economic Policy, Western Economic Association International, vol. 27(1), pages 54-66, 01.
  5. William Easterly & Jozef Ritzan & Michael Woolcock, 2006. "Social Cohesion, Institutions, and Growth," Working Papers 94, Center for Global Development.
  6. Mwangi S. Kimenyi, 2007. "Markets, Institutions And Millennium Development Goals," Economic Affairs, Wiley Blackwell, vol. 27(2), pages 14-19, 06.
  7. Pierre-Guillaume Méon & Khalid Sekkat, 2005. "Does corruption grease or sand the wheels of growth?," Public Choice, Springer, vol. 122(1), pages 69-97, January.
  8. Edinaldo Tebaldi & Bruce Elmslie, 2008. "Institutions, Innovation And Economic Growth," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 33(2), pages 27-53, December.
  9. Harvey Goldstein & Min Yang & Rumana Omar & Rebecca Turner & Simon Thompson, 2000. "Meta-analysis using multilevel models with an application to the study of class size effects," Journal of the Royal Statistical Society Series C, Royal Statistical Society, vol. 49(3), pages 399-412.
  10. N. Gregory Mankiw & David Romer & David N. Weil, 1990. "A Contribution to the Empirics of Economic Growth," NBER Working Papers 3541, National Bureau of Economic Research, Inc.
  11. Elizabeth Asiedu, 2006. "Foreign Direct Investment in Africa: The Role of Natural Resources, Market Size, Government Policy, Institutions and Political Instability," The World Economy, Wiley Blackwell, vol. 29(1), pages 63-77, 01.
  12. Dani Rodrik & Arvind Subramanian & Francesco Trebbi, 2002. "Institutions Rule: The Primacy of Institutions over Geography and Integration in Economic Development," NBER Working Papers 9305, National Bureau of Economic Research, Inc.
  13. Egger, Peter & Winner, Hannes, 2005. "Evidence on corruption as an incentive for foreign direct investment," European Journal of Political Economy, Elsevier, vol. 21(4), pages 932-952, December.
  14. Magda Kandil, 2009. "Determinants of institutional quality and their impact on economic growth in the MENA region," International Journal of Development Issues, Emerald Group Publishing, vol. 8(2), pages 134-167, December.
  15. Daron Acemoglu & Simon Johnson & James Robinson, 2004. "Institutions as the Fundamental Cause of Long-Run Growth," NBER Working Papers 10481, National Bureau of Economic Research, Inc.
  16. Rodrik, Dani, 1998. "Where Did all the Growth Go? External Shocks, Social Conflict and Growth Collapses," CEPR Discussion Papers 1789, C.E.P.R. Discussion Papers.
  17. Jasper M. Dalhuisen & Raymond J. G. M. Florax & JHenri L. F. de Groot & Peter Nijkamp, 2003. "Price and Income Elasticities of Residential Water Demand: A Meta-Analysis," Land Economics, University of Wisconsin Press, vol. 79(2), pages 292-308.
  18. Jae-Hyung Lee, 2006. "Business corruption, public sector corruption, and growth rate: time series analysis using Korean data," Applied Economics Letters, Taylor & Francis Journals, vol. 13(13), pages 881-885.
  19. Maria Abreu Henri L. F. de Groot & Raymond J. G. M. Florax, 2005. "A Meta-Analysis of β-Convergence: the Legendary 2%," Journal of Economic Surveys, Wiley Blackwell, vol. 19(3), pages 389-420, 07.
  20. Paolo Mauro, 2004. "The Persistence of Corruption and Slow Economic Growth," IMF Staff Papers, Palgrave Macmillan, vol. 51(1), pages 1.
  21. Shimpalee, Pattama L. & Breuer, Janice Boucher, 2006. "Currency crises and institutions," Journal of International Money and Finance, Elsevier, vol. 25(1), pages 125-145, February.
  22. Isaac Ehrlich & Francis T. Lui, 1999. "Bureaucratic Corruption and Endogenous Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 107(S6), pages S270-S293, December.
  23. Lorenzo Pellegrini & Reyer Gerlagh, 2004. "Corruption's Effect on Growth and its Transmission Channels," Kyklos, Wiley Blackwell, vol. 57(3), pages 429-456, 08.
  24. Ali, Fathi & Fiess, Norbert & MacDonald, Ronald, 2008. "Do Institutions Matter for Foreign Direct Investment?," SIRE Discussion Papers 2008-34, Scottish Institute for Research in Economics (SIRE).
  25. Sanjeev Gupta & Hamid Davoodi & Rosa Alonso-Terme, 2002. "Does corruption affect income inequality and poverty?," Economics of Governance, Springer, vol. 3(1), pages 23-45, 03.
  26. Anil Mishra & Kevin Daly, 2007. "Effect of quality of institutions on outward foreign direct investment," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 16(2), pages 231-244.
  27. DE LA CROIX, David & DELAVALLADE, Clara, . "Growth, public investment and corruption with failing institutions," CORE Discussion Papers RP 2107, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  28. North, Douglass C, 1994. "Economic Performance through Time," American Economic Review, American Economic Association, vol. 84(3), pages 359-368, June.
  29. Dani Rodrik, 2006. "Institutions for High-Quality Growth: What They Are and How to Acquire Them," Chapters, in: Institutions, Globalisation and Empowerment, chapter 2 Edward Elgar Publishing.
  30. Martin Paldam & Erich Gundlach, 2007. "Two Views on Institutions and Development: The Grand Transition vs the Primacy of Institutions," Economics Working Papers 2007-02, Department of Economics and Business Economics, Aarhus University.
  31. Katsushi Imai & Raghav Gaiha & Ganesh Thapa, 2010. "Is the Millennium Development Goal on Poverty Still Achievable? The Role of Institutions, Finance and Openness," Oxford Development Studies, Taylor & Francis Journals, vol. 38(3), pages 309-337.
  32. Rowley, Charles K., 2000. "Political culture and economic performance in sub-Saharan Africa," European Journal of Political Economy, Elsevier, vol. 16(1), pages 133-158, March.
  33. Toke Aidt & Jayasri Dutta & Vania Sena, 2006. "Governance Regimes, Corruption and Growth: Theory and Evidence," Discussion Papers 15_2006, D.E.S. (Department of Economic Studies), University of Naples "Parthenope", Italy.
  34. Edgardo Campos, J. & Lien, Donald & Pradhan, Sanjay, 1999. "The Impact of Corruption on Investment: Predictability Matters," World Development, Elsevier, vol. 27(6), pages 1059-1067, June.
  35. Toke S. Aidt, 2009. "Corruption, institutions, and economic development," Oxford Review of Economic Policy, Oxford University Press, vol. 25(2), pages 271-291, Summer.
  36. Laroche, P., 2000. "What do Unions do to Productivity? A Meta-Analysis," Papers 2000-5, Groupe de recherche en économie financière et en gestion des entreprises, Universite Nancy 2.
  37. Butkiewicz, James L. & Yanikkaya, Halit, 2006. "Institutional quality and economic growth: Maintenance of the rule of law or democratic institutions, or both?," Economic Modelling, Elsevier, vol. 23(4), pages 648-661, July.
  38. Busse, Matthias & Hefeker, Carsten, 2007. "Political risk, institutions and foreign direct investment," European Journal of Political Economy, Elsevier, vol. 23(2), pages 397-415, June.
  39. T. D. Stanley, 2001. "Wheat from Chaff: Meta-analysis as Quantitative Literature Review," Journal of Economic Perspectives, American Economic Association, vol. 15(3), pages 131-150, Summer.
  40. Daron Acemoglu & Simon Johnson & James A. Robinson, 2000. "The Colonial Origins of Comparative Development: An Empirical Investigation," NBER Working Papers 7771, National Bureau of Economic Research, Inc.
  41. Jac C Heckelman & Benjamin Powell, 2010. "Corruption and the Institutional Environment for Growth," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 52(3), pages 351-378, September.
  42. Kaufmann, Daniel & Kraay, Aart & Mastruzzi, Massimo, 2007. "The worldwide governance indicators project : answering the critics," Policy Research Working Paper Series 4149, The World Bank.
  43. Keith Blackburn & Kyriakos C. Neanidis & M. Emranul Haque, 2008. "Corruption, Seigniorage and Growth: Theory and Evidence," CESifo Working Paper Series 2354, CESifo Group Munich.
  44. John M. Luiz, 2009. "Institutions and economic performance: Implications for African development," Journal of International Development, John Wiley & Sons, Ltd., vol. 21(1), pages 58-75.
  45. Rahman, Aminur & Kisunko, Gregory & Kapoor, Kapil, 2000. "Estimating the effects of corruption - implications for Bangladesh," Policy Research Working Paper Series 2479, The World Bank.
  46. Ventelou, Bruno, 2002. "Corruption in a Model of Growth: Political Reputation, Competition and Shocks," Public Choice, Springer, vol. 110(1-2), pages 23-40, January.
  47. Mohsin Habib & Leon Zurawicki, 2002. "Corruption and Foreign Direct Investment," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 33(2), pages 291-307, June.
  48. Stephen Everhart & Jorge Martinez- Vazquez & Robert McNab, 2009. "Corruption, governance, investment and growth in emerging markets," Applied Economics, Taylor & Francis Journals, vol. 41(13), pages 1579-1594.
  49. Elizabeth Asiedu & James Freeman, 2009. "The Effect of Corruption on Investment Growth: Evidence from Firms in Latin America, Sub-Saharan Africa, and Transition Countries ," Review of Development Economics, Wiley Blackwell, vol. 13(2), pages 200-214, 05.
  50. Kwabena Gyimah-Brempong, 2002. "Corruption, economic growth, and income inequality in Africa," Economics of Governance, Springer, vol. 3(3), pages 183-209, November.
  51. Kalle Pajunen, 2008. "Institutions and inflows of foreign direct investment: a fuzzy-set analysis," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 39(4), pages 652-669, June.
  52. Imam Patrick Amir & Jacobs Davina, 2014. "Effect of Corruption on Tax Revenues in the Middle East," Review of Middle East Economics and Finance, De Gruyter, vol. 10(1), pages 24, April.
  53. Hillman, Arye L., 2004. "Corruption and public finance: an IMF perspective," European Journal of Political Economy, Elsevier, vol. 20(4), pages 1067-1077, November.
  54. Abdoul' Ganiou Mijiyawa, 1982. "Sustained Economic Growth: Do Institutions Matter, and Which One Prevails?," Cato Journal, Cato Journal, Cato Institute, vol. 2(3), pages 385-420, Winter.
  55. Augustin Kwasi Fosu, 2009. "Inequality and the Impact of Growth on Poverty: Comparative Evidence for Sub-Saharan Africa," Journal of Development Studies, Taylor & Francis Journals, vol. 45(5), pages 726-745.
  56. Murphy, Kevin M & Shleifer, Andrei & Vishny, Robert W, 1993. "Why Is Rent-Seeking So Costly to Growth?," American Economic Review, American Economic Association, vol. 83(2), pages 409-414, May.
  57. Abdoul' Ganiou Mijiyawa, 2008. "Sustained Economic Growth: Do Institutions Matter, and Which One Prevails?," Post-Print hal-00363144, HAL.
  58. T. D. Stanley, 2005. "Beyond Publication Bias," Journal of Economic Surveys, Wiley Blackwell, vol. 19(3), pages 309-345, 07.
  59. Yelena Kalyuzhnova & Ali M Kutan & Taner Yigit, 2009. "Corruption and Economic Development in Energy-rich Economies," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 51(2), pages 165-180, June.
  60. Augustin Fosu & Robert Bates & Anke Hoeffler, 2006. "Institutions, Governance and Economic Development in Africa: An Overview," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 15(1), pages 1-9, April.
  61. Donaldson, John A., 2008. "Growth is Good for Whom, When, How? Economic Growth and Poverty Reduction in Exceptional Cases," World Development, Elsevier, vol. 36(11), pages 2127-2143, November.
  62. Paolo Mauro, 1995. "Corruption and Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 110(3), pages 681-712.
  63. Pranab Bardhan, 1997. "Corruption and Development: A Review of Issues," Journal of Economic Literature, American Economic Association, vol. 35(3), pages 1320-1346, September.
  64. 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.
  65. Boris Podobnik & Jia Shao & Djuro Njavro & Plamen Ivanov & H. Stanley, 2008. "Influence of corruption on economic growth rate and foreign investment," The European Physical Journal B: Condensed Matter and Complex Systems, Springer;EDP Sciences, vol. 63(4), pages 547-550, June.
  66. Asfaw Kumssa & Isaac M. Mbeche, 2004. "The role of institutions in the development process of African countries," International Journal of Social Economics, Emerald Group Publishing, vol. 31(9), pages 840-854, Septembe.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:31226. 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: (Joachim Winter)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.