The Misery Index, Corruption and Income Inequality in Latin American Countries: A Panel Cointegration and Causality Analysis

Abstract

The globalization process has led to considerable increases in the flow of goods, services and financial assets, and thus global production and wealth have risen substantially during the past 40 years. However, discussion has now centered around the rising income inequality and poverty in some parts of the world. In this regard, the Latin American region is one of the leading regions in terms of income inequality. This study investigates the interaction among misery index, corruption and income inequality in Latin American countries during the 2002-2014 period, employing the Westerlund and Edgerton (2007) LM bootstrap cointegration test and the Kónya (2006) bootstrap panel Granger causality test. The findings reveal that increases in both the misery index and corruption played a part in the increases in income inequality. Furthermore, the results of the causality test reveal unidirectional causality from the misery index to income inequality and bidirectional causality between corruption and income inequality.

Institutional Quality, Corruption, and Income Inequality - A Panel Study of Selected SAARC Economies

“…In contrast, the analysis demonstrates a positive and significant association with corruption (Bayar and Aytemiz, 2019;Gupta, Davoodi, and Alonso-Terme, 2002;Policardo et al, 2019;Dwiputri, I. N., Arsyad, L., & Pradiptyo, R., 2018). This suggests that a 1 unit increase in corruption leads to a 0.019% increase in income inequality, according to the findings.…”

How Does Corruption Affect Currency Substitution? Evidence from Nigeria

“…Second, several studies have confirmed that corruption hurts inflation, unemployment and income inequality (Bayar & Aytemiz, 2019;Enofe et al, 2016;Ozsahin & Ulcer, 2017). Generally, the existence and persistence of the triple problems of inflation, unemployment and income inequality often lead to poverty, macroeconomic instability, civil unrest and violence.…”

Causality between corruption and poverty: An analysis for South American countries

“…In this sense, You and Khagram (2005) and Bayar and Aytemiz (2019) pointed out that the rich have both greater motivation and opportunity to engage in corruption, while the poor are more vulnerable to extortion and less able to be monitored and hold the rich accountable. This being true, a few individuals may be manipulating the institutional and regulatory environment in these countries to maintain the status quo, which triggers adverse effects on the economy, and thus leading to an increase in poverty.…”