Corruption: global evidences
By: Prof. Ibrahim Onour
University of Khartoum
In the following we highlight international evidences on
destructive impact of corruption on economic development , and then later in a separate essay we will tackle the impact of corruption on the economies of African countries including Sudan.
In the past decade voluminous research investigated the impact of corruption on economic development in various countries across the globe.
Mo (2001) uses cross-country data covering 49 countries in two separate periods 1970-1995 and 1996- 2000 and conclude that corruption has a devastating negative impact on economic growth through its negative effect on investment and human capital development and its impact on political instability. This result implies that corruption lead to economic decline via its destructive impact on human capital development, slowdown of investnent inflows, and political destablization.
Furthermore,
Ugur & Dasgupta (2011), investigated the impact of corruption on economic growth using two separate groups of countries, that is of low income and of high income. Their finding revealed that corruption has a negative effect on GDP per-capita growth in high and low income groups. In otherwords, corruption can raise poverty levels in societies.
Aidt et al. (2008) developed a model of interdependence between corruption and governance using cross country data on separate two groups, a group of countries of high quality institutions and countries of low quality institutions. They found no significant association between corruption and growth in countries with low quality institutions but with regard to high quality institutions corruption has a negative impact but insignificant for many countries in the group.
Venard (2013) investigated the association between institutional quality, corruption level, and economic growth using cross-country data of 120 countries using World Bank database on governance to show that the impact of both institutional quality and corruption on economic development is negative, implying that improvement in institutional quality and corruption control are more effective strategies for economic growth in countries with lower institutional quality than those of higher institutional quality.
Aidt & Dutta (2008) show that corruption affect negatively economic growth in countries with good institutional quality, but insignificantly countries with poor institutional quality.
Onour (2024) investigated the degree of association between institutional quality and three explanatory variables, including democracy, accountability, and human development indicators. Estimation results indicate evidence of significant effect of accountability and human development indexes on improving institutional quality, while the effect of democracy level on institutional quality is insignificant. This result implies that difference in political systems ( democracy versus dictatorship) in African countries is not a significant factor on improving institutional quality.In otherwords, democratic governments are not necessarly of higher quality institutions than non democratic regimes.