Lucas Paradox, Institutional Quality and Corruption: Evidence from D.R. Congo

MULOWAYI, Francis K. and PINSHI, Christian P. (2023): Lucas Paradox, Institutional Quality and Corruption: Evidence from D.R. Congo.

Abstract

This paper aims to examine the Lucas paradox in the DRC, and more specifically to test whether institutional quality could be a key variable for the resolution of the paradox in the DRC. Using Granger’s dynamic causality analysis and Toda-Yamamoto’s in-depth analysis, we find that the Lucas paradox is true in the DRC, and that institutional quality, including corruption or macroeconomic management, are far from resolving this paradox in the DRC.

• Item Type: MPRA Paper
• Language: English
• Keywords: Lucas Paradox, Foreign direct investment, Institutional quality, corruption
• Subjects: C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models ; Multiple Variables > C32 - Time-Series Models ; Dynamic Quantile Regressions ; Dynamic Treatment Effect Models ; Diffusion Processes ; State Space Models; D - Microeconomics > D7 - Analysis of Collective Decision-Making > D73 - Bureaucracy ; Administrative Processes in Public Organizations ; Corruption; E - Macroeconomics and Monetary Economics > E0 - General > E02 - Institutions and the Macroeconomy; F - International Economics > F2 - International Factor Movements and International Business > F21 - International Investment ; Long-Term Capital Movements

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