Corruption, Public Expenditure, and Human Capital Accumulation

Spyridon Boikos

Working Paper series from Rimini Centre for Economic Analysis

Abstract: In this paper we investigate the effect of corruption on human capital accumulation through two channels. The first channel is through the effect of corruption on the public expenditure on education and the second channel is through the effect of corruption on the physical capital investment. Public expenditure on education affects positively human capital, while physical capital can obsolete human capital. Initially, we construct an endogenous two-sector growth model with human capital accumulation and by considering corruption as an exogenous variable we try to explore the impact of corruption on the allocation of public expenditure and as such on the distribution of human capital across different sectors. The theoretical model’s results suggest that corruption has different effects on human capital accumulation through the two channels. Then we use a smooth coefficient semiparametric model to capture possible non-linearities, and the results support the existence of nonlinearities between human capital and corruption.

Keywords: Corruption; Public Expenditure; Economic Growth; Human Capital Investment; Semiparametric Estimation (search for similar items in EconPapers)
JEL-codes: D73 H52 J24 O41 O47 (search for similar items in EconPapers)
Date: 2013-02
New Economics Papers: this item is included in nep-dge and nep-hrm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Corruption, Public Expenditure and Human Capital Accumulation (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:rim:rimwps:17_13

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