Are corruption and economic growth associated? Empirical evidence for Brazilian States

Marco A. Kerbeg, Gustavo C. Haase, Mathias Tessmann and Alexandre V. Lima
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Marco A. Kerbeg: Catholic University of Brasília and Bank of Brazil, Brazil
Gustavo C. Haase: Catholic University of Brasília and Bank of Brazil, Brazil
Alexandre V. Lima: Brazilian Institute of Education, Development and Research –IDP, Brazil

Journal of Economics and Political Economy, 2024, vol. 11, issue 1-2, 56-67

Abstract: This paper seeks to investigate whether corruption influences and may be associated with per capita economic growth in Brazilian states. For this, information about per capita economic growth and an indicator of corruption for each Brazilian state are considered, in addition to control variables that aim to isolate the influence of corruption, such as the illiteracy rate of young people over 15 years old, population, GDP real, real GDP per capita, openness, total public expenditure, total public expenditure weighted by real GDP, total credit weighted real GDP and value-added of agriculture weighted by real GDP. The effects of these variables on per capita income are not linear and that is why the generalized method of moments (GMM) in 1st difference is used. The results indicate that corruption and economic growth are associated, and the three estimated models present the variables referring to the corruption indicator as statistically significant. These findings are useful for the scientific literature that investigates the influence of corruption on economic growth by bringing empirical evidence to Brazil and for more efficient decision-making by political decision-makers in combating corruption and the use of public resources.

Keywords: Economic growth; Corruption; Population; Real GDP per capita; GMM. (search for similar items in EconPapers)
JEL-codes: E02 E23 O11 O47 (search for similar items in EconPapers)
Date: 2024
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