Corruption, institutional quality and economic growth in selected West African countries (1995-2014)
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Date
2015
Authors
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Journal ISSN
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Publisher
Economics,Obafemi Awolowo University
Abstract
The study analysed the trend of corruption; and examined the impact of corruption on economic growth in selected West African Countries. It also examined the interaction effects of corruption and institutional quality on economic growth in the countries. These were with the view to determining the influence of corruption through institutional quality on economic growth in selected West African Countries.
Annual secondary data of 13 countries selected using data availability in selecting the countries covering the period from 1995 to 2014 were used. Data on corruption perception index, institutional quality which were measured by control of corruption, regulatory quality, government effectiveness, rule of law, political stability and absence of violence, voice and accountability, and Gross Domestic Product (GDP) were sourced from the publications of Transparency International (TI); World Governance Indicators (WGI), while data on GDP were sourced from World Development Indicators (WDI) of the world Bank. Data collected were analysed using tables, graphs; and panel vector auto-regressive (PVAR) methods.
The results showed that the trend of corruption in selected West African Countries were not stable during the period of the study. For example, corruption was high in countries like Benin republic, Burkina Faso, Cameroon and Cape Verde between 1995 and 2005; it fluctuated downward in the year 2010 and later rising in 2011 through 2014. Trend of corruption rose at different rates in countries like Guinea, Liberia, Mauritius, Nigeria, Senegal, Sierra Leone, and Togo throughout the period of the study. The results also showed that there were negative impact of corruption through rule of law on economic growth (t = -0.6897, p>0.05); positive impact of corruption through regulatory quality on economic growth (t = 0.3258, p>0.05); positive impact through control of corruption on economic growth
(t = 0.5560, p>0.05); negative impact through voice and accountability on economic growth (t = -1.2137, p>0.05); negative impact through government effectiveness on economic growth (t = -1.9825, p<0.05); and a positive impact through political stability and absence of violence on economic growth (t = 2.2134, p<0.05) over the period of study. In these results, only government effectiveness and political stability and absence of violence were statistically significant while other variables were not statistically significant. This suggests that their impacts on economic growth were minimal. Furthermore, the overall results showed that corruption has a negative impact through institutional quality on economic growth over the period 1995 to 2014 by 1.12 percentage points.
Moreover, results of interaction of corruption with institutional quality showed that there is negative relationship between control of corruption and economic growth (t = -0.1851, p>0.05); regulatory quality has a negative relationship with economic growth (t = -1.2360, p>0.05); while a positive relationship exist between political stability and economic growth (t = 3.8939, p<0.05). Finally, the aggregate results of interaction effect of corruption and institutional quality on economic growth showed that corruption has a negative effect on economic growth by 0.14 percentage points over the period 1995 to 2014.
The study found that corruption has a negative influence through institutional quality on economic growth in selected West African Countries.
Description
xii,100p
Keywords
Corruption, Economic growth, Violence, Control of corruption
Citation
Osabiyi,E.K(2015). Corruption, institutional quality and economic growth in selected West African countries (1995-2014).Obafemi Awolowo University