Globalization, (fighting) corruption and development: how are these phenomena linearly and nonlinearly related in wealth effects?
Simplice Asongu
No 12/024, Working Papers of the African Governance and Development Institute. from African Governance and Development Institute.
Abstract:
Purpose – Is globalization instrumental in fighting corruption? Do wealth effects matter in this fight? Are findings valid when linearity assumptions are dropped? This paper assesses the Lalountas et al. (2011) hypotheses (conclusions) in the African context. Design/methodology/approach – Though not in form, yet in substance the intuition and motivation are compatible with those of Lalountas et al. (2011). Four hypotheses are tested from different methodological and contextual standpoints. In the analysis, while the economic and social dimensions of globalization are reflected in the HDI, the political dimension is captured by good governance indicators. A TSLS-IV estimation technique is applied where-in globalization instruments of trade and financial liberalization are instrumented on human-development and government-quality to account for corruption (corruption-control) effects. Thus the intuition is assessing how globalization is instrumental in the fight against corruption through human development (economic and social dimensions) and government quality (political dimension). Findings – Hypothesis 1: Globalization is a powerful tool in fighting corruption (True). Hypothesis 2: Globalization is an important tool in fighting corruption only in Middle and High income countries (Partially True). Hypothesis 3: For Low income countries globalization has no significant impact on corruption (True). Hypothesis 4: Hypotheses 1 and 2 are valid only under linearity (False). Social Implications – In countries with high levels of per capita, emphasis is placed on the political and social dimensions of globalization and as a result the effects of this phenomenon on corruption-control are significant. Conversely, in nations with low levels of per capita income, emphasis is given to the economic dimension of international integration and as a result the effect of globalization on corruption is limited. As a policy implication, persistent globalization as an effective means to reduce corruption in developing countries might lead to inappropriate policies in low income countries. Originality/value – This paper has tested the Lalountas et al. (2011) hypotheses in the continent where concerns of globalization, human development and corruption are most acute.
Keywords: Globalization; Corruption; Wealth effects; Africa (search for similar items in EconPapers)
JEL-codes: F10 F30 I30 O10 O55 (search for similar items in EconPapers)
Pages: 32
Date: 2012-02-24
References: Add references at CitEc
Citations: View citations in EconPapers (5)
Forthcoming in the Journal of Economic Studies
Downloads: (external link)
http://www.afridev.org/RePEc/agd/agd-wpaper/Global ... n-wealth-effects.pdf Revised version, 2013 (application/pdf)
Related works:
Working Paper: Globalization, (fighting) corruption and development: how are these phenomena linearly and nonlinearly related in wealth effects? (2012) 
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:agd:wpaper:12/024
Access Statistics for this paper
More papers in Working Papers of the African Governance and Development Institute. from African Governance and Development Institute. Contact information at EDIRC.
Bibliographic data for series maintained by Asongu Simplice (info@afridev.org).