Capital Flight and Extent of Corruption control in the Least Corrupt African Countries: An Empirical assessment

Pacific Yapatake () and Gabriella Ngaba ()
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Pacific Yapatake: Yaounde, Cameroon
Gabriella Ngaba: Yaoundé, Cameroon

No 19/002, CEREDEC Working Papers from Centre de Recherche pour le Développement Economique (CEREDEC)

Abstract: The purpose of this paper is to investigate the effect of corruption control on capital flight in the least corrupt African countries and uses panel data covering the period of 1996-2010. The results show that the extent of corruption proxy, the total natural resources rent are statistically significant and affect positively the capital across the pooled, random and fixed effects. Inflation and economic growth are also found to have a negative impact on capital flight. Moreover, exchange rate has a negative and significant effect on capital flight. The findings of this study suggest that the extent of corruption control by responsible institutions can be considered as one of the most effective weapons in the fight against capital flight in the least corrupt African countries. The paper recommends to the government of the least corrupt countries in Africa to create an enabling political and economic environment for investor’s attractiveness. This in turn will reduce the occurrence of capital flight and lead to the sustainable development.

Keywords: Capital flight; extent of corruption control; Panel data; the Least Corrupt African Countries (search for similar items in EconPapers)
JEL-codes: C33 C50 F21 O38 O55 (search for similar items in EconPapers)
Pages: 19
Date: 2019-01
New Economics Papers: this item is included in nep-env
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Forthcoming: Indian Growth and Development Review

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