Abstract
The main objective of this paper is to examine the impact of corruption control on the performance of economies of ten least corrupt African countries spanning the period 1996-2014 and make policy recommendations on how to improve it. In detail, the paper makes an effort to: evaluate the extent to which the control of corruption impact on economic performance of the sampled African nations indexed as least corrupt. The study makes use of data obtain from World Development and World governance Indicators (WDI & WGI) and adopts panel granger causality framework, Engle Granger based panel cointegration, and FMOLS (fully modified ordinary least squares) estimation (weighted Estimation). The findings show that the variables are cointegrated in the long run with regards to economic growth and its determinants, as well as the result of Vector Error Correction Mechanism (VECM) confirms that the variables are dynamically interacted among the 10 selected African countries. The result of FMOLS does not support the hypothesis that corruption control and political stability have positive influence on the growth of the economy. However, government effectiveness and gross domestic savings have positive impacts on economic growth. The study recommends more policy that can strengthen the anti-corruption agency by improving the quality of infrastructure in those countries as well as enhancing social responsibility and collective consciousness.
Highlights
Corruption is regarded as an obstacle to economic development of a country
A unidirectional causality is detected and runs from government effectiveness (GE), political stability (PS) and control of corruption (CC) to gross domestic savings (GS) implying that when a country is politically stable, effectively governed and has least corruption indices is capable of saving from its income which can invariably lead to economic growth
The significance of the ECTt−1 statistically indicates that the adjustment speed of the variables from short run distortions to the long run path is relatively -1.1062 for economic growth, -0.5293 for gross domestic savings, -0.3779 for political stability and -0.3284 for government effectiveness compared to the speed of adjustment of 0.2968 for control of corruption
Summary
Corruption is regarded as an obstacle to economic development of a country. corruption has been into existence and spread in human daily lives. Lot of factors can impact the economic growth but our study used 4 variables such as: control of corruption, government effectiveness and gross domestic investment.
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