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Corruption, Public Expenditure, and Human Capital Accumulation

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  • Spyridon Boikos

    (University of Milan, Italy)

Abstract

In this paper we investigate the effect of corruption on human capital accumulation through two channels. The first channel is through the effect of corruption on the public expenditure on education and the second channel is through the effect of corruption on the physical capital investment. Public expenditure on education affects positively human capital, while physical capital can obsolete human capital. Initially, we construct an endogenous two-sector growth model with human capital accumulation and by considering corruption as an exogenous variable we try to explore the impact of corruption on the allocation of public expenditure and as such on the distribution of human capital across different sectors. The theoretical model’s results suggest that corruption has different effects on human capital accumulation through the two channels. Then we use a smooth coefficient semiparametric model to capture possible non-linearities, and the results support the existence of nonlinearities between human capital and corruption.

Suggested Citation

  • Spyridon Boikos, 2013. "Corruption, Public Expenditure, and Human Capital Accumulation," Working Paper series 17_13, Rimini Centre for Economic Analysis.
    • Handle: RePEc:rim:rimwps:17_13
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    1. Human capital and corruption
      by Economic Logician in Economic Logic on 2013-08-06 20:09:00

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    More about this item

    Keywords

    Corruption; Public Expenditure; Economic Growth; Human Capital Investment; Semiparametric Estimation;
    All these keywords.

    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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