The Impact of Corruption on Economic Growth in OIC Countries

Abstract

Economic growth in a country can be attributed to many variables, both positive and negative. Raising the level of human capital, openness and investment are examples of factors typically considered to have a positive impact on economic progress, while corruption is one of the factors that are often seen as detrimental to economic growth. The purpose of this study is to analyse whether the levels of perceived corruption in a cross-section of countries have affected their economic growth rates over the years [2003][2004][2005][2006][2007][2008][2009][2010]. The study is conducted with a regression on a sample of 14 countries and eight variables for the time period in question. The models are constructed on the basis of the endogenous growth theory. Results using economic freedom index (EFI) shows that corruption has a negative impact of economic growth in the countries in question.

Social capital and economic growth: empirical evidence from OIC countries

“…This result rejects the hypothesis formulated in the study that corruption is negatively related to economic growth. This is different from the findings of Ertimi et al (2016) which states that corruption affects the decline in economic growth. But the corruption variable is not a variable that significantly influences economic growth during the observation period.…”

“…Fourth, voting has a positive effect but then decreases. Ertimi et al (2016) analyzed the relationship between corruption and the economic growth rate in 14 OIC countries. This research uses quantitative methods and is analyzed using panel data regression.…”

The Implication of Corruption on Economic Progress of Nigeria

“…This result implies that the rate of corruption in Nigeria has a significant positive impact on economic growth of the country. This result agrees with the findings of (Damir & Petar, 2011;Ahmad, Ullah & Arfeen, 2012;Huang, 2012;Peev & Mueller, 2012) but conflicts with the studies of (Pulok, 2010;Diri, 2013;Maria et al, 2013;Nguyen, Nguyen & Binh, 2014;Nwankwo, 2014;Trabelsi & Trabelsi, 2014;Eritimi et al 2016;Adegboyega, 2017;Thach et al, 2017) who found that corruption influences economic growth negatively.…”

“…The empirical result revealed that corruption impact on economic growth most in zone 2 period which is the medium term period. Eritimi et al (2016) examined the impact of corruption on economic growth of 14 Organization of Islamic Cooperation (OIC) from 2003 to 2010. The study employed endogenous growth theory and economic freedom index for analysis.…”

“…The Anti-graft agencies in Nigeria such as Economic and Financial Crimes Commission (EFCC) and Independent and Corrupt Practices Commission (ICPC) have been under pressure and keep wondering whether corruption can be eradicated in Nigeria since the high level of lootings and embezzlement are perpetrated by renowned businessmen, public office holders and government officials. However, several studies on the effect of corruption on economic growth have shown significant positive influence (Damir & Petar, 2011;Ahmad, Ullah & Arfeen, 2012;Huang, 2012;Peev & Mueller, 2012) while some others studies revealed significant negative impact (Pulok, 2010;Diri, 2013;Maria et al, 2013;Nguyen, Nguyen & Binh, 2014;Nwankwo, 2014;Trabelsi & Trabelsi, 2014;Eritimi et al 2016;Adegboyega, 2017;Thach et al, 2017). Based on this discrepancy, this study aims at determining the influence of corruption on Nigeria's fiscal progress.…”