Corruption Slowing Economic Growth In Low-Income Countries

A significant increase in incidents of corruption is undermining the benefits of economic liberalisation, according to a systematic review by researchers at the University of Greenwich. Drawing on over 100 studies and 596 estimates on low-income and other countries, the review documents the economic impacts of corruption, and concludes that practices such as nepotism, bribery and embezzlement are slowing economic growth directly and indirectly through adverse effects on human capital and public finance.

Report authors Dr Mehmet Ugur of the Business School and Dr Nandini Dasgupta of the School of Humanities, state that corruption is an ‘international public bad’, and not one confined to low-income countries.

Their review, written primarily for policy-makers and those attempting to tackle corruption, offers ample evidence of the need for anti-corruption policy interventions in support of steady economic growth. But it also demonstrates that such interventions must be integrated with improved governance, particularly the management of public investment and expenditure, in order to have any sizeable impact on economic growth.

While corrupt practices are endemic throughout the world, there is growing determination in many countries to root out dishonest practices that favour the wealthy at the expense of the poor, and the wider economy. Tens of thousands have taken to the streets in Brazil and India during recent weeks to protest against the culture of kickbacks, secret party funding, turning a blind eye and repaying ‘favours for favours’.

Evidence on the economic growth impacts of corruption in low-income countries and beyond: a systematic review is available to view online, and was funded by the UK Department for International Development (DFID).