How does corruption affect sustainable development? A threshold non-linear analysis

This paper investigates the impact of corruption on sustainable development using the Seo and Shin (2016) threshold model for a panel data set of 96 to 103 developed and developing countries from 1996 to 2019. The paper contributes to the ongoing debate about whether corruption greases or sands the...

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Bibliographic Details
Published inEconomic analysis and policy Vol. 78; pp. 505 - 523
Main Authors Fhima, Fredj, Nouira, Ridha, Sekkat, Khalid
Format Journal Article
LanguageEnglish
Published Elsevier B.V 01.06.2023
Subjects
Corruption
Governance
Sustainable development
Threshold models
D73
O47
Q01
Corruption
C24
Threshold models
G3
Governance
Sustainable development
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Summary:This paper investigates the impact of corruption on sustainable development using the Seo and Shin (2016) threshold model for a panel data set of 96 to 103 developed and developing countries from 1996 to 2019. The paper contributes to the ongoing debate about whether corruption greases or sands the wheels of sustainable development. All results support the hypothesis of the existence of thresholds. Examining the full sample, the impact of corruption on sustainable development is regime-specific and dependent on the quality of governance. In developed countries, corruption always hinders sustainable development, while in developing countries the impact of corruption on sustainable development is regime-specific and dependent on the quality of governance. When the quality of governance is low, highly corrupt countries achieve higher levels of sustainable development, which is consistent with the “grease the wheels” hypothesis.
ISSN:0313-5926
DOI:10.1016/j.eap.2023.03.020