External debt, corruption control, and economic prosperity in the SADC region

Gisele Mah () and Gildas Dinga ()

Modern Finance, 2025, vol. 3, issue 2, 58-74

Abstract: This study investigates the impact of external debt and corruption control on the economic prosperity of Southern African Development Community (SADC) countries, using the Legatum Prosperity Index as a comprehensive measure encompassing nine dimensions. The study employs various estimation techniques, including Driscoll-Kraay, instrumental variables, quantile-on-quantile regressions, and the Granger causality test. The findings indicate that external debt positively influences economic prosperity in the SADC region. Additionally, effective corruption control enhances this prosperity. Causality tests reveal a bidirectional relationship between external debt, economic prosperity, and corruption control. The study recommends strengthening anti-corruption agencies, initiating open data policies, implementing market reforms, and pursuing fiscal consolidation to promote debt sustainability and foster prosperity within the SADC region.

Keywords: External debt; Control of corruption; Economic prosperity; Driscoll-Kraay technique; SADC (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:bdy:modfin:v:3:y:2025:i:2:p:58-74:id:247

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