Abstract

The objective of this research was to determine the effect of corruption on economic growth in Peru for the period 1998-2018. It was determined how economic growth was affected both in the short and long term by corruption. The corruption control index was used to measure corruption and the variation in gross domestic product (GDP) at constant prices was used to measure economic growth. To determine this effect, the hypothetical deductive method was used as a general method since we sought to corroborate a hypothesis and as a specific method, we used the Autoregressive Model of Distributed Lag (ARDL) since this model adapts well to small samples, likewise we had a non-experimental research design – longitudinal explanatory. Data were collected from the World Bank and the Ministry of Education (MINEDU) from 1998 to 2018. As a result of the econometric ARDL model, it was obtained that corruption had a negative effect on economic growth since an improvement of one percentage point in the corruption index would mean an improvement of 0.55 percentage points in economic growth. Therefore, it is concluded that the effect of corruption has a negative effect on economic growth as expected according to the reviewed antecedents.

Highlights

  • IntroductionCorruption is largely due to the loss of values, most of the corrupt do not see this as a moral transgression, they feel shame not for transgressing values but for fear of punishment or the discomfort that would produce to be discovered (Huber, 2016)

  • The hypothetical deductive method was used as a general method since we sought to corroborate a hypothesis and as a specific method, we used the Autoregressive Model of Distributed Lag (ARDL) since this model adapts well to small samples, likewise we had a nonexperimental research design – longitudinal explanatory

  • As a result of the econometric ARDL model, it was obtained that corruption had a negative effect on economic growth since an improvement of one percentage point in the corruption index would mean an improvement of 0.55 percentage points in economic growth

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Summary

Introduction

Corruption is largely due to the loss of values, most of the corrupt do not see this as a moral transgression, they feel shame not for transgressing values but for fear of punishment or the discomfort that would produce to be discovered (Huber, 2016). The author expected the effects of corruption on economic growth to be negative in the long run based on all the literature reviewed and was able to contrast this with his results, where a one percentage point improvement in the corruption index resulted in a 0.083 percentage point improvement in GDP per capita in the long run. This would indicate that corruption is considered a problem for economic growth

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