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Genuine Wealth Per Capita as a Measure of Sustainability and the Negative Impact of Corruption on Sustainable Growth in Sub-Sahara Africa

Forson, Joseph Ato and Buracom, Ponlapat and Chen, Guojin and Baah-Ennumh, Theresa Yabaa (2014): Genuine Wealth Per Capita as a Measure of Sustainability and the Negative Impact of Corruption on Sustainable Growth in Sub-Sahara Africa. Published in: South Africa Journal of Economics , Vol. 85, No. 1 (10 February 2017): pp. 178-195.

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Abstract

In this paper we argue that the answer to the question of whether the impact of corruption on development is homogenous, is no. Our optimism rest on how development may be conceptualized. When equated to a narrow measure in economic-wise which fundamentally ignores critical issues, then there is a possibility the outlook could be positive. But when conceptualized using a broad-based approach such as sustainable development, then the outlook could be negative. We assess a panel of 22 economies in Sub-Sahara Africa with the most recent dataset (1996-2013) from the World Bank and other reputable agencies. Our finding is quite robust. It holds in POLS, Fixed effects and GMM within IV settings; and it also holds for different measures of institutions and different measures of development using growth per capita GDP and genuine wealth per capita respectively. Taking stock of major policy blue-prints of selected countries in the region on the fight against corruption, we are able to point out that institutions play important role in insulating citizens against the devastation caused by corruption. Overall, through this comparison, we are able to signal that both incidental and systematic corruption poses a long-term threat to sustainable development.

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