Genuine Wealth Per Capita as a Measure of Sustainability and the Negative Impact of Corruption on Sustainable Growth in Sub-Sahara Africa

In this paper we argue that the answer to the question of whether the impact of corruption on development is homogenous, is no. Our optimism rest on how development may be conceptualized. When equated to a narrow measure in economic-wise which fundamentally ignores critical issues, then there is a possibility the outlook could be positive. But when conceptualized using a broad-based approach such as sustainable development, then the outlook could be negative. We assess a panel of 22 economies in Sub-Sahara Africa with the most recent dataset (1996-2013) from the World Bank and other reputable agencies. Our finding is quite robust. It holds in POLS, Fixed effects and GMM within IV settings; and it also holds for different measures of institutions and different measures of development using growth per capita GDP and genuine wealth per capita respectively. Taking stock of major policy blue-prints of selected countries in the region on the fight against corruption, we are able to point out that institutions play important role in insulating citizens against the devastation caused by corruption. Overall, through this comparison, we are able to signal that both incidental and systematic corruption poses a long-term threat to sustainable development

Causes of Corruption: Evidence from Sub-Sahara Africa

This study explores the causes of corruption for Sub-Sahara Africa in a panel of 22 countries from 1996 to 2013. The sources of corruption are grouped under three main thematic areas – historical roots, contemporary causes and institutional causes to make way for both subjective and objective measures. The subjective measures allow this paper to gauge the effectiveness of anticorruption policies. Focusing on three estimation strategies and using the perceived level of corruption as dependent variable, we find ethnic diversity, resource abundance and educational attainment to be markedly less associated with corruption; whereas wage levels of bureaucrats and anticorruption controls using government effectiveness and regulatory quality breeds substantial corruption. Press freedom was variedly associated with corruption. As a policy implication, the fight against corruption on the continent needs to be reinvented through qualitative institutional reforms. Existing educational systems should be used as medium to intensify awareness on the devastating effects of corruption on national development

Corruption, EU Aid Inflows and Economic Growth in Ghana: Cointegration and Causality Analysis

This paper uses the Johansen cointegration technique to examine the causal relationship between aid inflows and economic growth for Ghana during the period 1970-2013. To better reflect causality, corruption (governance) and trade are included as control variables. In order to test for causality in the face of cointegration among variables, a vector error correction model (VECM) is used in place of vector autoregressive (VAR) model. This is complemented with Toda and Yamamoto’s test to point to causal direction. Appropriate stability test to account for structural breaks in the series is undertaken. Our estimation results suggest that GDP growth has one cointegrating vector relationship with governance, EU aid inflows and trade in both short and long runs. There is a long run unidirectional causal relationship from EU Aid inflows to GDP growth, and a short run unidirectional causality from trade to GDP. Governance was ineffective to power growth. The error correction terms are the source of causation in the long. The results indeed confirm popular conjecture that corruption in Ghana stifles development. Therefore government’s decision to launch a national anti-corruption plan in 2011 though long overdue, but is justifiable. However, such an attempt will only be effective if and only if a conscious effort is made by all stakeholders to work in hand in deepening good governance (reducing corruption) as a trajectory for promoting economic growth and to serve as inducement for a continue aid inflows from multilateral donors to sustain efforts at achieving the millennium development goals in Ghana

Causes of Corruption: Evidence from Sub-Sahara Africa

This study explores the causes of corruption for Sub-Sahara Africa in a panel of 22 countries from 1996 to 2013. The sources of corruption are grouped under three main thematic areas – historical roots, contemporary causes and institutional causes to make way for both subjective and objective measures. The subjective measures allow this paper to gauge the effectiveness of anticorruption policies. Focusing on three estimation strategies and using the perceived level of corruption as dependent variable, we find ethnic diversity, resource abundance and educational attainment to be markedly less associated with corruption; whereas wage levels of bureaucrats and anticorruption controls using government effectiveness and regulatory quality breeds substantial corruption. Press freedom was variedly associated with corruption. As a policy implication, the fight against corruption on the continent needs to be reinvented through qualitative institutional reforms. Existing educational systems should be used as medium to intensify awareness on the devastating effects of corruption on national development