Relationship Between Bribery and Economic Growth-an Empirical Analysis.

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Date Submitted: 09/30/2011 10:35 AM

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This journal article gives us an analysis report of the relationship between bribery and economic growth.

The base of the study is bribe taking and Gross Domestic Product (GDP) of 20 countries over a period of 12 years. The higher incidents of bribery adversely affect economic growth of the nation. But reversing the scenario does not have the same impact. From the analysis we will be able to understand the rate of economic growth and the existence of bribery.

Two sets of data were collected over 12 year period, 1995-2006, for twenty countries. The level of bribery is measured by Corruption per Index. The rate of economic growth-annual percent changes in the gross domestic product were calculated from the data obtained from the International Monetary Fund.

The major findings of this paper are that bribery and economic growth impact each other both unidirectionaly and simultaneously. The impact of lower levels of bribery on the economic growth is stronger than the impact of higher economic growth rate on reducing bribery levels. It is also found that there may not exist any relationship among these two variables in some countries.

The findings suggest that concerted efforts to reduce bribery must remain desirable policy for national governments, international agencies and non-governmental organizations. Reducing the prevalence of bribery would contribute to higher rate of economic growth and that in turn would contribute to a higher rate of economic growth and that it could further accelerate the decline in the bribe taking which would lead to welfare of the people.