Corruption and Economic Growth in Sub-Saharan African Countries: An Empirical Analysis

Jarita, D.; Nur Hidayah, Z.

doi:10.7187/GJATSI2020-8

Authors

Jarita, D. Department of Economics, Faculty of Economics and Management Sciences, International Islamic University Malaysia, Jalan Gombak, 53100 Kuala Lumpur, Malaysia
Nur Hidayah, Z. Academy of Contemporary Islamic Studies (ACIS), UiTM Cawangan Selangor, Kampus Puncak Alam, 42300 Bandar Puncak Alam, Selangor, Malaysia

DOI:

https://doi.org/10.7187/GJATSI2020-8

Keywords:

Corruption, Economic growth, Generalized method of moments, Sub-Saharan Africa

Abstract

Corruption is a disease in itself. Corruption recognizes no limitation and boundaries. It may infect the wealthy, and thus the poor, it may affect an organization and destroy a nation. 2019 Corruption Perception Index of Sub Saharan Africa gives an average of 32 scores, indicating that major corruption problems need to be resolved centering against petty bribery up until a high level of political corruption. This study reinvestigates the impact of corruption on economic growth in Sub-Saharan African countries by adopting alternative indicators of corruption based on the actual cases of corruption. Based on cross-sectional data from 47 countries, this study aims to improve the findings using instrumental variables to correct for endogeneity bias. The data is analyzed using the generalized method of moments (GMM). The findings indicate that corruption impedes economic growth of Sub-Saharan African countries. For most of the selected countries, the effect of economic development has been exacerbated by weak governance structures and the incidence of corruption in the region. The solution is needed for Sub-Saharan African economics to grow further in the long term.

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