Nexus among corruption, political instability and natural resources on economic recovery in Vietnam

Abstract

Vietnam experienced political unrest from its founding in 1945–2000. However, since 2000, hints of system stability have been observed. Political unrest strengthens the foundations of national corruption over time. By considering the functions of per-capita income and natural resource development, this study assessed the effects of corruption, political instability (PIS), and natural resources on economic development. We used data from 1980 to 2020 to apply linear and non-linear Autoregressive Distributed Lag (ARDL). Both approaches supported the theory when applied to Vietnam. Our findings show that PIS has a detrimental impact on a nation's GDP, whereas natural resources increase GDP over the long and short term. In contrast, corruption temporarily boosts GDP, while lowering it over time. The asymmetric results over the long-term show that as corruption increases, GDP decreases, and as corruption decreases, GDP increases. The causality correlation supports these findings and suggests policies to combat lease and patronage practices and create a more transparent national environment. This will help control the obvious problems of PIS, corruption, and untapped natural resources and support the country's economic development and prosperity.