Corruptio And Its Impact On Growth, Business And Government Effectiveness

4290 words - 18 pages

Corruption and its impact on Growth, Business and Government Effectiveness

Ivo Dimovsky Managerial Economics – Empirical paper EMBA - American University of Bulgaria April 4th, 2012

ABSTRACT

Corruption, like an infection, has co-existed with human society for a long time. Corruption has received significant attention among economists and international financial institutions during the last few decades, given its impact on economic growth both in developed and developing countries. There is an increasing volume of literature on the relationship between corruption and economic growth, and the general conclusion is that corruption slows down the long-term growth of an economy through ...view middle of the document...

2 Government effectiveness - captures perceptions of the quality of public services, the quality of the civil service and the degree of its independence from political pressures, the quality of policy formulation and implementation, and the credibility of the government's commitment to such policies. (Official World Bank Metric) – 2011. 3 According to the World Bank WW Economic database, applied to the sub-set of countries in the period of 1960 – 2008.
2

INTRODUCTION

Corruption has a large significance with its ability to influence and disrupt the roots of an economy. It abrades property rights and has major consequences for both government efficiency and social equity. It severely impacts political institutions and thus also erodes democracy and the social, political, and economic benefits coming from it. It is often done in secret and consequently demolishes the nature of the economic system. The academic literature remains inconclusive however about the impact of corruption on economic prosperity or development. Some early authors argued that corruption has the potential to improve efficiency and even promote and help growth. On the other side, Shleifer and Vishny 4(1993), explain that corruption is detrimental for investment and economic prosperity. Up to this point, however, the empirical evidence has supported the existence of a linear and negative correlation between the level of corruption and the average growth rate of GDP per worker, the government effectiveness as well as the ease of establishing and running a business. There are, of course, many additional factors which play a role in cultivating the level of corruption, like the distinction between “free” and “non-free” countries in the type of their political regime, development level of educational system and many more sub-factors, which, for example, Ehrlich and Lui (1999) apply in their studies. In this paper we seek to prove the significance of the negative impact of corruption to economic growth by studying the empirical results of a regression analysis run over a sub-set of countries,
4

Shleirfer, Andrei and Rober Vishny. 1993 “Corruption.” Quarterly Journal of Economics

3

filtered by the economic research department of the World Bank and categorized as “developed” and “developing” samples of states, in general. Please refer to table 1.1 The following section discusses the root causes of corruption and its consequences to economy and society. Section 3, covers the econometric work and the results obtained and, the last section of the paper elaborates on the conclusions and the future dimensions of the problem.

WHAT IS CORRUPTION5
Defining the phenomenon

As surprising as it may seem, definitions of corruption may vary from source to source, culture to culture and economic author to author. Corruption is an often used word, but very rarely correctly defined phenomenon, part of our social life. Corruption or level of corruption is widely used in public...

Other Papers Like Corruptio and Its Impact on Growth, Business and Government Effectiveness

September 11 And Its Impact On Society

1143 words - 5 pages changes:Security measuresIt is barely surprising, especially when considering the monumental extent of the damages incurred in terms of losses of property and human life that the attacks carried out against America on the 11th of September 2004 collectively impacted American society in a lasting manner. One of the most immediate indications of such an impact, furthermore, was of a marked increase in discrimination against all individual with Asian

The Impact of Corruption on National Growth and Economic Development

4703 words - 19 pages established an insurance division (AFInsure) offering insurance to cover loss or damage to mobile phones purchased from the company. Revenue earned from each division, analysed by the age of the customer, is shown in Table 1 on page 8. Analysts agree that growth in the mobile phone business is slowing down and this is supported by the figures given in Table 2 on page 8 showing revenue from sales (both retail and Internet) for AutoFone and its

Global Warming and Its Effects on Business

2464 words - 10 pages http://www.climatehotmap.org/fingerprints.html ). The difference between what the UK and the USA are doing reflects how global warming is changing the business world. Just in the UK, global warming has caused a major economic loss in the automobile industry. In the USA, global warming has not yet made its impact on the economy as severely as it will in the future. The major points of concern are oil, natural gas, automotive, tobacco and

Inflation And Its Impact

4746 words - 19 pages interpreted relatively low nominal interest rates as evidence of monetary ease, despite falling or slow growth of money and credit. This was the same error the System had made in the Great Depression. Its consequence was that the System permitted money growth to fall in recessions and rise excessively in expansions. Chairman Martin never tried systematically to relate current decisions or actions to longer-term influences on output, employment, and

Hipaa and Its Impact

543 words - 3 pages clerks who file paper; instead they scan records in a patient’s electronic chart. Doctor are writing fewer prescriptions and entering it into the electronic medical record. This prevents the pharmacy being unsure of how to fill a prescription because of a physician’s handwriting, which lessens the phone calls to the physician’s office to verify information. HIPAA had a great impact on our world that we knew, but it was for the better. In my

Illegal Immigration and Its Impact on the Economy

1023 words - 5 pages Illegal immigration and its impact on the Economy Illegal immigration can be defined as people voluntarily migrating to another country, defying the country’s immigration laws and regulation. When it comes to United States it is home to more than 12 million illegal people (DHS 2005). Illegal immigration is a source of political issue and is heavily debated on the floor. Illegal immigration is not just only a political issue it has direct

Globalization And Its Negative Impact On Selling Your Stuff

1423 words - 6 pages American companies are now outsourcing entities such as manufacturing plants and labor, it is difficult to compete with the sale of brand new items on eBay and most e-commerce sites. Globalization has negatively impacted SYS's attempt to expand their business with the sale of brand new items at fixed prices rather than an auction-style format. Their competitors are companies that have outsourced their manufacturing plants in countries like China and

Cell Phone and Its Harmful Impact on Human

1285 words - 6 pages Impact of Cell Phone’s Radio Frequency in Children Herzing University Saugat Basnet The development and use of mobile device services in the last decade have hugely increased the amount of radiofrequency electromagnetic wave (RF-EMW). High exposures towards radio frequency (RF) in our daily lives have raised concerns regarding the harmful effects on human health especially on children. Children with cell phone exposure have higher odds of

Language Abilities and Its Impact on Language Development

1350 words - 6 pages How Language Abilities and Deficiencies Impact Language Development 1 Claytonia L. Butler Grand Canyon University ECH- 515 October 9, 2013 How Language Abilities and Deficiencies Impact Language Development 2 While searching for information on the topic, I found that language abilities and deficiencies does have a major impact in literacy

The Chernobyl Accident and Its Impact on Belarus

575 words - 3 pages allowed the radiation to escape. 13%-30% of the material escaped. Immediate Impact: 203 people were hospitalized immediately. 31 of them eventually died. Most of these people were workers in the plant or local firefighters. NW winds from the Black Sea carried the radiation for miles in the following days. Scandinavian detectors picked up on the abundance of radiation, but the Soviet government denied everything. Effects of

Impact and Effectiveness of Bank Mergers and Acquisition

1826 words - 8 pages University Rasidah Mohd Said; Fauzias Mat Nor; Soo-Wah Low; Aisyah Abdul Rahman (2008) The efficiency effects of mergers and acquisition in Malaysian banking institution, Asian Journal of Business and Accounting Sufian; Fadzlan (2004) The efficiency effects of bank mergers and acquisition in a developing economy John Mylonakis (2006) The impact of banks mergers and acquisition on their staff employment and effectiveness, International Research Journal of Finance and Economics Mahadzir Ismail; Hasni Abdul Rahim (2009), Impact of merger on efficiency and productivity in Malaysian commercial banks, Faculty of Business Management, Universiti Teknologi MARA Kedah

Related Essays

Culture And Its Impact On International Business

5020 words - 21 pages Culture and its Impact on International Business Introduction As businesses have grown and expanded to the international level; certain aspects of business have become abundantly clear. One thing that has become the norm when doing business on the international level is dealing with different cultures. Culture, as defined by Geert Hofstede is “the collective programming of the human mind that distinguishes the members of one human group

Credit Crunch And Its Impact On Ryanair

4581 words - 19 pages Contents1. Background31.1 Theories of Credit Crunch31.2 History of Credit Crunch 2007-200842. About Ryanair83. What effect Credit Crunch has on Ryanair?93.1 Risk Management in the past93.2 Risk Management of Ryanair in 2008114. Conclusion12References131. BackgroundThe world in 2008 suffers from a phenomenon called credit crunch. In this essay I am going to examine the credit crunch and its impact on Ryanair a Low Cost Carrier company. Credit

Financial Crisis And Its Impact On China

1824 words - 8 pages their loans since they could not afford it, making banks in danger of going bankrupt. This process caused the global financial crisis and directly after this banks refused to lend money to the public causing shrinkage of the economy (Positive Money, 2015). FINANCIAL CRISIS AND ITS IMPACT ON CHINA In 2008 during the financial crisis two widely believed assumptions about China was shattered. The first being that China would

Globalization And Its Impact On Women

4925 words - 20 pages Assignment On Globalization and its impact on women rights and empowerment Course Title Development Economics Course Code F-210 Submitted To AlfarunnaharRuma Lecturer Dept. of Economics Submitted By Group- 01 Session: 2010-2011 Finance & Banking JatiyaKabiKaziNazrul Islam University Trishal, Mymensingh Submission Date: 24 January 2013 Members of group one Serial No. | Name | ID Number | 01 | Md.DelowerHossain | 11132601 | 02