Corruption, Structural Reforms, and Economic Performance in the Transition Economies

George Abed and Hamid Davoodi

No 2000/132, IMF Working Papers from International Monetary Fund

Abstract: Recent studies have highlighted the adverse impact of corruption on economic performance. This paper advances the hypothesis that corruption is largely a symptom of underlying weaknesses in public policies and institutions, a formulation that provides deeper insights into economic performance than do measures of “perceived corruption.” The hypothesis is tested by assessing the relative importance of structural reforms vs. corruption in explaining macroeconomic performance in the transition economies. The paper finds that for four widely used measures of economic performance—growth, inflation, the fiscal balance, and foreign direct investment—structural reforms tend to dominate the corruption variable.

Keywords: WP; transition economy; exchange rate; GDP growth; wage inflation; Corruption; structural reforms; transition economies; structural reform; reform index; reforming country; priori country classification; inflation rate; Foreign direct investment; Fiscal stance; Exchange rate arrangements (search for similar items in EconPapers)
Pages: 47
Date: 2000-07-01
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Citations: View citations in EconPapers (73)

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