Regular Article
Corruption and Economic Growth

Mo, Pak Hung—Corruption and Economic Growth
https://doi.org/10.1006/jcec.2000.1703Get rights and content

Abstract

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.

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    I thank the anonymous referees for their useful comments on the paper. Any remaining errors are solely the responsibility of the author.

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