Do corrupting activities hamper economic growth? Fresh empirical evidence from an emerging economy

John Amoh, Kwasi Awuah-Werekoh and Kenneth Ofori-Boateng

Journal of Financial Crime, 2020, vol. 29, issue 3, 1114-1130

Abstract: Purpose - This study aims to examine the effect of corruption on the economic growth of Ghana and to establish the strength of relationships among corrupting activities. Design/methodology/approach - The research used structural equation modelling on selected data from the World Economic Forum executive opinion survey on corrupting activities and data on economic growth measures from the world development indicators to achieve the research objectives. Findings - The results show that all the observed corrupting activities (except diversion of public funds) adversely influence selected economic growth indicators. The study concludes that corrupting activities, independently and mutually impede Ghana’s economic growth. Research limitations/implications - The research is limited by the availability of data, hence, quarterised data on selected variables from 2008 to 2017 were examined. Practical implications - The results suggest that corruption encapsulates all the seven activities of corruption to one degree or another, which are economic growth hampering. Originality/value - The study extends the corruption-economic growth nexus literature by incorporating several corrupting activities from multiple sectors/areas as follows: the government and politicians, private businesses, judiciary and citizens into a single model to test how these independently and mutually impede economic growth. By identifying and using specific corrupting activities from distinct and diverse sectors/areas to capture both the supply side and demand side of corruption and the private and public sectors, a better comprehension of the corruption-economic growth nexus is attained. This may aid emerging economies and anti-corruption agencies in drafting specific and targeted corruption reduction policies/programmes to minimise poverty and raise living standards to aid the realisation of sustainable development goals.

Keywords: Development; Ghana; Growth; Corruption; Economic growth; Economic (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jfcpps:jfc-11-2019-0150

DOI: 10.1108/JFC-11-2019-0150

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