Corruption in Transition Economies: Cause or Effect?

Craig Depken

Zagreb International Review of Economics and Business, 2017, vol. 20, issue 1, 113-123

Abstract: This paper investigates the empirical relationship between corruption, economic growth, and government spending in fourteen transitioning economies from 1995-2013. We find strong evidence of bilateral Granger causation between economic growth and corruption for the full sample but weaker evidence of such a relationship for four former Yugoslav republics. We also find bilateral Granger causality between government spending and corruption but a weaker unidirectional Granger causality from government spending to corruption in four former Yugoslav republics. Our results recommend caution when assuming that corruption is purely exogenous in empirical models. JEL Classification: O40; D73

Keywords: economic growth; government spending; public corruption; Granger causality (search for similar items in EconPapers)
Date: 2017
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