Does corruption matter for economic development? Long run evidence from Bangladesh

Mohammad Habibullah Pulok (Department of Economics, Southeast University, Dhaka, Bangladesh) (Centre for Health Economics Research and Evaluation, University of Technology Sydney (UTS), Sydney, Australia)
Moin Uddin Ahmed (Institute of Health Economics, University of Dhaka, Dhaka, Bangladesh)

International Journal of Social Economics

ISSN: 0306-8293

Publication date: 6 March 2017

Abstract

Purpose

Despite remarkable economic growth in the last two decades, corruption is a “way of life” in Bangladesh. The purpose of this paper is to investigate the long run relationship between economic development and corruption in Bangladesh over 1984-2013.

Design/methodology/approach

This study employs autoregressive distributed lag (ARDL) bounds test method to examine the long run relationship or cointegration between corruption and per capita real GDP in Bangladesh using annual time series data. International Country Risk Guide’s (ICRG) corruption index is used as the proxy to measure the degree of corruption.

Findings

The results of ARDL bounds test confirm that there exists a long run association between corruption and economic development in Bangladesh. Findings from the long run estimation provide evidence of negative impact of corruption on economic development. The negative value of the error correction term in the short model reinforces the existence of long run relationship.

Originality/value

Using multivariate time series approach, this paper contributes to corruption literature by investigating the long run relation between corruption and economic development in Bangladesh. Bangladesh would be able to accelerate its economic development further by reducing the level of corruption through institutional reforms and raising public awareness. Most importantly, government should focus on identifying and abolishing laws and programmes promoting corruption.

Keywords

Citation

Pulok, M. and Ahmed, M. (2017), "Does corruption matter for economic development? Long run evidence from Bangladesh", International Journal of Social Economics, Vol. 44 No. 3, pp. 350-361. https://doi.org/10.1108/IJSE-05-2015-0132

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Publisher

:

Emerald Publishing Limited

Copyright © 2017, Emerald Publishing Limited

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