Economic growth and corruption: a comprehensive study of regional Asia, Mena and the African union

Abstract

This thesis provides a thorough examination of the effects of corruption on economic growth in three geographical areas: the Asian Region, the Middle East and North Africa (MENA) region, and the African Union. In this context, this study looks at the primary variables or themes that quantify economic growth, such as GDP growth, foreign direct investment (FDI), government effectiveness, regulatory quality, and the rule of law. This thesis focuses on how corruption affects economic growth in these nations. This study is an empirical inquiry into whether corruption is a serious constraint to expansion in the Asian Region, the Middle East, and the African Union. Based on expert assessments and opinion surveys, the Corruption Perceptions Index (CPI) ranks countries by public sector corruption. It has been published annually since 1995 by the non- government organisation Transparency International. According to the CPI, corruption is the abuse of power for personal gain. Corruption is further defined as the exploitation of public office for private gain, specifically the acquisition of riches through deceptive or dishonest means (such as evading taxes or concealing assets). The prevalence of corrupt practices varies widely among countries and economic sectors. The problem of corruption is not new, dating back to the dawn of civilisation, and it persists in every culture. Corruption can harm a nation’s economy as well as authority. Economic growth and corruption may be complex and bidirectional. Corruption disrupts market dynamics, foreign investment, and resource allocation. Corruption increases transaction costs and regulatory hurdles, and unpredictability, discourages investment. Prolonged corruption can further damage investor confidence and deter international and domestic investment. These factors may affect work efficiency and resource accumulation, slowing innovation and technology. Corruption also impairs economic growth. Weak institutions can increase corporate uncertainty, property rights violations, and restrict court access and long-term economic progress. Slow economic growth means low-income prospects, and in countries with severe poverty and wealth inequality, people may act unethically to survive or advance. The findings of this research may be useful in raising public awareness of corruption and offering policymakers new tools to fight the problem. The results of the study could be specifically used by policymakers in the MENA and the African Union to make the necessary adjustments to their policies and procedures, thereby increasing the likelihood that the region’s recent period of economic progress is sustainable. There is a lack of agreement in the academic literature about the impact of corruption on economic growth, especially in Asia, the Arab Gulf states, and the African Union. While the corruption–growth nexus has received a great deal of attention in other established and developing nations, empirical studies of the Arab world are sparse due to a lack of data. This research adds to the growing body of empirical literature on corruption and economic development by aiming to address this knowledge gap. To demonstrate the correlation between corruption and economic growth in the Gulf states, this study will compare the Arab states of the Persian Gulf to the MENA and African Union blocs using seven empirical models spanning the years from 1995 to 2019.

Date of Award	2024
Original language	English
Awarding Institution	Western Sydney University
Supervisor	Partha Gangopadhyay (Supervisor), Walid Bakry (Supervisor) & Mamun Billah (Supervisor)