The Economic Times (India): A collection of articles about Corruption
Volume 29, Issue 1, March 2001, Pages 66–79
This study introduces a new perspective on the role of corruption in economic growth and provides quantitative estimates of the impact of corruption on the growth and importance of the
transmission channels. In our ordinary least squares estimations, we find that a 1% increase in the corruption level reduces the growth rate by about 0.72% or, expressed differently, a one-unit
increase in the corruption index reduces the growth rate by 0.545 percentage points. The most important channel through which corruption affects economic growth is political instability, which
accounts for about 53% of the total effect. We also find that corruption reduces the level of human capital and the share of private investment. J. Comp. Econ., March 2001 29(1), pp. 66–79. School of Business, Hong Kong Baptist University, Kowloon Tong, Hong
Kong. Copyright 2001 Academic Press.
Journal of Economic Literature Classification Numbers: O40, O50.