TITLE:
Corruption and Economic Growth: Evidence from Egypt
AUTHORS:
Tarek Ghalwash
KEYWORDS:
Corruption, Development, Governance, Economic Growth
JOURNAL NAME:
Modern Economy,
Vol.5 No.10,
September
4,
2014
ABSTRACT: Based on a theoretical consideration of economic
growth model, this study empirically investigates the direct and indirect
impact of corruption on economic growth by incorporating the corruption index
in the growth model in the case of Egypt. The model provides a simple theoretical
framework in which the level of corruption as well as the effects of corruption
on output variables; forging direct investments, government expenditure,
openness and political instability are identified. Our main result provides
empirical evidence suggesting that corruption increases inefficiencies in
government expenditure and reduces investment and human capital, leading to a
negative impact on output. In addition, the human capital, openness and
political instability are the most important channel variables, through which
corruption is likely to reduce growth.