Corruption has a significant influence on economic growth in the short run, but not in the long run

Corruption InvestmentThis study of forty two developing countries uses Panel Dynamic Ordinary Least Squares – PDOLS – to examine the relationship between foreign direct investment, corruption and economic growth.

The results suggest that corruption has a significant influence on per capita GDP in the short run but is not significant in the long run. It was also found that lower levels of corruption enhance the impact of foreign direct investment on economic growth. This has important implications for policymakers.

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Author(s):

Marie Freckleton, (Department of Economics, University of the West Indies, Kingston, Jamaica); Allan Wright, (Central Bank of Barbados, Bridgetown, Barbados); Roland Craigwell, (Department of Economics, University of the West Indies, Cave Hill, Barbados)

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Comparison of 2010 Corruption levels: Singapore, Barbados, Jamaica, T&T

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Additional Info:

Transparency International (TI) defines corruption as the abuse of entrusted power for private gain. This definition encompasses corrupt practices in both the public and private sectors. The Corruption Perceptions Index (CPI) ranks countries according to the perception of corruption in the public sector. The CPI is an aggregate indicator that combines different sources of information about corruption, making it possible to compare countries. Read more of this post