scholarly journals Foreign Aid and Corruption: Clarifying Murky Empirical Conclusions

2019 ◽  
Vol 54 (3) ◽  
pp. 253-263 ◽  
Author(s):  
Uchenna Efobi ◽  
Ibukun Beecroft ◽  
Simplice Asongu
Keyword(s):  
Foreign Aid ◽  
Social Infrastructure ◽  
African Countries ◽  
Jel Codes ◽  
Transparency International ◽  
Governance Indicators ◽  
The World Bank ◽  
Specific Direction ◽  
Economic Infrastructure ◽  
Freedom House

This study considers foreign aid flow by sector in which the aid is directed and then estimates its impact on corruption in order to clarify the specific direction of aid flow that triggers (or does not trigger) corrupt practices. Data are from the Organisation for Economic Co-operation and Development database, Freedom House dataset, and the World Bank Governance Indicators. The dynamic system GMM and quantile regressions (QR) were estimated for robust estimation and correction of endogeneity issues. We found that aid flows for the development of economic infrastructure, multi-sector and programme assistance were consistently reducing corruption. This result stands for both the entire sample and for the African countries (especially for countries at the 25th, 50th and 75th quintiles). Aid flows to social infrastructure and debt relief significantly induce corrupt practices in the sampled countries. These forms of aid only spur rent-seeking behaviour for countries at the lower quintiles of corruption. Two robust checks were estimated, including: (a) using an alternate explained variable—the corruption measure by Transparency International; and (b) correcting for endogeneity in the QR estimation by instrumenting the independent variables of interest with their first-lags. For both checks, the signs and significant values of the variables were consistent with the earlier estimation. JEL Codes: B20, F35, F50, O10, O55

The globalized state: Measuring and monitoring governance

2010 ◽  
Vol 13 (4) ◽  
pp. 511-530 ◽  
Author(s):  
Bogdan Buduru ◽  
Leslie A. Pal
Keyword(s):  
Public Administration ◽  
Transparency International ◽  
International Agencies ◽  
Governance Indicators ◽  
The World Bank ◽  
The World ◽  
Quality Of Governance ◽  
Powerful Mechanism ◽  
Freedom House

In the last 20 years, there has been an explosion of ‘governance indicators’ purporting to measure and track the quality of governance (especially public administration) among states. These indicators are sponsored by international agencies such as the World Bank, NGOs such as Transparency International and Freedom House, and private sector risk assessors. We argue that this web of standards marks a distinctive feature of globalized, if loose, coordination among states and an increase in monitoring and auditing functions. The article reviews the major governance indicators, their characteristics and limitations. We conclude that these indicators are a little noticed, but supremely powerful mechanism of discordant control and discipline on state systems around the world.

scholarly journals How to Develop the EU Justice Scoreboard into a Rule of Law Index: Using an Existing Tool in the EU Rule of Law Crisis in a More Efficient Way

2021 ◽  
Vol 22 (6) ◽  
pp. 936-955
Author(s):  
András Jakab ◽  
Lando Kirchmair
Keyword(s):  
Rule Of Law ◽  
Eu Member States ◽  
Expert Opinions ◽  
Governance Indicators ◽  
The World Bank ◽  
The World ◽  
Single Number ◽  
Critical Overview ◽  
The Eu ◽  
Freedom House

AbstractIn this Article we argue that rule of law indices are a powerful tool to detect ills in the rule of law of EU Member States. In order to explain how to improve the indices’ potential, we give a critical overview of the methodological issues of the four rule of law indices which we consider particularly instructive for our purpose. These are the indices provided by the Freedom House (“Freedom in the World,” FIW), the Bertelsmann Stiftung (“Bertelsmann Transformation Index,” BTI), the World Bank (“Worldwide Governance Indicators,” WGI), and the World Justice Project (“Rule of Law Index,” WJP RLI). After analyzing the strengths and weaknesses of these indices, we turn to the EU Justice Scoreboard (EUJS). While the introduction of the EUJS in 2013 has already been an important step in order to lay the ground for an EU-wide analysis, in this Article we suggest how the EUJS should be further developed into a proper rule of law index by aggregating expert opinions into a single number. This would make the EUJS a significantly more useful tool in the ongoing EU rule of law crisis.

scholarly journals Corrupción política, transparencia y movimientos ciudadanos: una aproximación comparativa entre China y Japón

2016 ◽  
Vol 15 (2) ◽  
Author(s):  
Nuria Ruiz Morillas
Keyword(s):  
World Bank ◽  
Political Corruption ◽  
Chinese Society ◽  
Xi Jinping ◽  
Transparency International ◽  
Governance Indicators ◽  
The World Bank ◽  
The World ◽  
Corruption Index ◽  
Per Capita

La corrupción política es uno de los temas que más preocupan al gobierno de Xi Jinping y a la sociedad china en general. En este artículo se analizan los efectos perjudiciales de la corrupción sobre determinadas variables sociales, económicas e institucionales. En primer lugar, se presenta el estado actual de la corrupción política en China y se exploran algunos movimientos sociales surgidos como respuesta a este fenómeno. Como indicadores de corrupción se han utilizado el índice de percepción de la corrupción (elaborado por Transparencia Internacional) y el índice de control de la corrupción (uno de los seis indicadores de gobernabilidad desarrollados por el Banco Mundial). A continuación, se ha extendido el estudio a Japón por tratarse de un país de contexto político y económico distinto al de China. A partir de los datos obtenidos, se ha realizado una aproximación comparativa del estado de la corrupción entre los dos países y se han estudiado las correlaciones de los indicadores anteriores con el grado de libertad (publicado por la Casa de la Libertad) y con el producto interior bruto per cápita (publicado por el Banco Mundial) en los últimos años. Political corruption is one of the most important issues for the Xi Jinping´s government and Chinese society in general. This article analyses the harmful effects of corruption on certain social, economic and institutional variables. First, it presents the current state of political corruption in China and it explores some social movements that have emerged in response to this phenomenon. The corruption perceptions index (prepared by Transparency International) and the control of corruption index (one of the six governance indicators developed by the World Bank) have been used as indicators of corruption. The study was then extended to Japan as a country with a different political and economic context than China. Based on the data obtained, a comparative analysis of the state of corruption between the two countries was carried out. We have studied the correlations of the previous indicators with the degree of freedom (published by Freedom House) and with the Gross Domestic Product per capita (published by the World Bank) in recent years. 

scholarly journals Financial constraint, trust, and export performances: firm-level evidence from Africa

2021 ◽  
pp. 1-23
Author(s):  
Maty Konte ◽  
Gideon Ndubuisi
Keyword(s):  
Financial Constraints ◽  
Interpersonal Trust ◽  
Negative Relationship ◽  
Financial Constraint ◽  
African Countries ◽  
Firm Level ◽  
Country Level ◽  
The World Bank ◽  
Negative Effect ◽  
Enterprise Surveys

Abstract Several existing studies have documented a negative relationship between firm financial constraint and export activities but do not attempt to examine factors that could attenuate this relationship in Africa. In this paper, we examine the effect of financial constraint on exports in Africa and explore how the level of trust in countries where firms are located shapes this relationship. We combine the World Bank Enterprise Surveys with different measures of country-level personal and interpersonal trust computed from the Afrobarometer surveys of 19 African countries. Our results show that financial constraints negatively affect export activities. However, this negative effect is attenuated for firms that are located in trust-intensive societies. These findings are robust to different specifications. Interestingly, we find that small and medium-sized enterprises in Africa are more likely to be affected by financial constraints but also more likely to benefit from a higher level of both personal and interpersonal trust, while for larger firms only interpersonal trust matters.

scholarly journals Foreign aid on economic growth in Africa: A comparison of low and middle-income countries

2015 ◽  
Vol 18 (4) ◽  
pp. 449-462 ◽  
Author(s):  
Aye Mengistu Alemu ◽  
Jin-Sang Lee
Keyword(s):  
Economic Growth ◽  
Foreign Aid ◽  
Low Income ◽  
Empirical Studies ◽  
Critical Role ◽  
Generalized Method Of Moments ◽  
African Countries ◽  
Middle Income ◽  
Middle Income Countries ◽  
Theoretical Hypothesis

Previous empirical studies on the effects of foreign aid on economic growth have generated mixed results that make it difficult to draw policy recommendations. The main reason for such mixed results is the choice of a single aggregate list of countries, regardless of the disparities in levels of development. This study therefore fills the development gap by disaggregating the African data into a panel of 20 middle- income and 19 low- income African countries over a period of 15 years between 1995 and 2010, and employing a dynamic generalized method of moments (GMM) model to address the dynamic nature of economic growth as well as the problems of endogeneity. The results of this study support the theoretical hypothesis that a positive relationship between aid and GDP growth exists, but only for low-income African countries, not middle-income ones. On the other hand, the study reveals that middle- income African countries tend to experience a greater impact on their economic growth from foreign direct investment (FDI) and natural resources revenues, mainly oil exports. This implies that the frequent criticism that foreign aid has not contributed to economic growth is flawed, at least in the case of low-income African countries. In fact, foreign aid has played a critical role in stimulating economic growth in such countries through supplementing domestic sources of finance such as savings, thus increasing the amount of investment and capital stock in them.

scholarly journals On The Relation Between Regulation And Economic Growth

2012 ◽  
Vol 11 (2) ◽  
pp. 147
Author(s):  
Atul A. Dar ◽  
Sal AmirKhalkhali
Keyword(s):  
Economic Growth ◽  
Fixed Effects ◽  
Developed Economies ◽  
Governance Indicators ◽  
Regulatory Quality ◽  
The World Bank ◽  
Quality Scale ◽  
Positive Growth ◽  
Accounting Model

This paper examines the relation between regulation and economic performance in the context of 23 developed economies. We apply a generalisation of the growth accounting model popularized by Solow to data over the 2002-2008 period. In the model, we assume that regulatory quality impacts on growth via its impact on total factor productivity growth. We look at three measures of regulatory quality, all of which are based on the set of governance indicators developed by the World Bank. The model is estimated using a fixed effects as well as a random effects estimation strategy. Our findings do lend support for the view that the better the quality of regulation, the higher rate of economic growth, but find no support for the view that the strength of the positive growth impact is stronger for countries that rank relatively lower on the regulatory quality scale.

scholarly journals Measuring institutional respect and State capacities in South America. A relational analysis on four dimensions of the Worldwide Governance Indicators (2017-2018)

AWARI ◽  
2020 ◽  
Vol 1 (1) ◽  
Author(s):  
Nicolás Vladimir Chuchco
Keyword(s):  
South America ◽  
Good Governance ◽  
Private Companies ◽  
International Investments ◽  
Four Dimensions ◽  
Developed Economies ◽  
Governance Indicators ◽  
The World Bank ◽  
Relationship Network ◽  
The Relationship

The measurement of “good governance” has become an object of (e) valuation by international actors. In this regard, it has occupied the attention of investors, donors, private companies, development agencies, academics, journalists, governments, and credit organizations in the last 30 years, accompanied by a greater flow of international investments to under developed economies. Among these indicators, the Worldwide Governance Indicators (WGI) produced by the World Bank stand out. Although these numbers are not used directly by the Bank to condition resources, they are used by organizations such as the Millennium Challenge Corporation (MCC) to decide in which countries allocate financial aid based on the results of some of the dimensions of these indicators. For this reason, this work seeks to investigate the relationships networks that exist between the indicators and the organizations that participate in providing data, asking about what type of organizations produce inputs of certain dimensions, what relationships they have with each other and with others, in terms of participation, and where the central houses that produce these inputs are located geographically. For this, we have analyzed and characterized the relationship network of production about four dimensions of the WGI indicators, according to the organizations that provided data for South America during the period 2017-2018. The main results obtained indicate that a small number of international organizations in the Northern hemisphere have greater participation in the supply of inputs, highlighting private companies or organizations linked to them.

Dimensions of Good Governance

2015 ◽  
pp. 176-190
Author(s):  
Chhanda Mandal ◽  
Anita Chattopadhyay Gupta
Keyword(s):  
Good Governance ◽  
Economic Recession ◽  
The Great Recession ◽  
Income Differentials ◽  
Governance Indicators ◽  
The World Bank ◽  
The World ◽  
The Face ◽  
Resilience Factors ◽  
The Relationship

Effectiveness of governance is realised through its responses to any financial crisis. This was put in question as the Great Recession affected the core economies severely. This study empirically investigated the relationship between accountability, corruption, and government effectiveness during the period 2002-2012. Our main purpose was to highlight the sizable gap that exists in the performance literature on cross-country studies especially against the changing economic world scenario. A comparison of the World Bank governance indicators between three countries chosen on the basis of income differentials and hence different adaptive characteristics of each country to the economic recession has been studied. The behavior of the governance indicators in the context of the world has been examined against the background of the shock that the depression had brought and the resilience factors embedded within the indicators in the face of the shocks were studied.

Determinants of and Obstacles to the Adoption of International Financial Reporting Standards in Africa

2016 ◽  
pp. 66-82
Author(s):  
Lesley Stainbank ◽  
Venancio Tauringana
Keyword(s):  
Financial Reporting ◽  
International Financial Reporting Standards ◽  
Reporting Standards ◽  
African Countries ◽  
Economic Openness ◽  
Financial Reporting Standards ◽  
Logistics Regression ◽  
The World Bank ◽  
Market Economic ◽  
Official Languages

This chapter investigates the determinants of and obstacles to the adoption of International Financial Reporting Standards (IFRSs) in Africa. Specifically we investigate whether English as an official language, educational levels, existence of a capital market, economic openness and economic growth are associated with the probability of a country adopting IFRSs with a sample of 46 African countries. Binary logistics regression was used to analyze the data. The results suggest that only English as one of the official languages was associated with the likelihood of a country adopting IFRSs. Through an examination of the Reports on the Observance of Standards and Codes of the World Bank, we document that the major obstacles to adopting IFRSs are the lack of enabling legislation for its adoption and a lack of capacity in all aspects of the accounting supply chain. The chapter concludes that more research is needed at a continent level given that most of the determinants we investigated are not associated with the likelihood of a country adopting IFRSs.

Corruption, Transparency, and E-Government

2011 ◽  
pp. 271-282
Author(s):  
Herwig Ostermann ◽  
Roland Staudinger
Keyword(s):  
International Development ◽  
Historical Perspective ◽  
Capital Inflows ◽  
Private Capital ◽  
African Countries ◽  
Political Issue ◽  
Transparency International ◽  
Economic Progress ◽  
Red Tape ◽  
The Cost

Regarded from a historical perspective, the appearance of corruption is not a new phenomenon at all. It can be traced back to the ancient civilizations of China, Egypt, Greece, India, Israel, and Rome, which all provide evidence of widespread illegality and corruption. In spite of its long history, corruption increasingly became a political issue in the 1990s: corruption scandals contributed substantially to the resignation of governments in Ecuador, Brazil, India, and Italy and unsettled well-established ruling parties in Japan and Mexico (Lash, 2004; Sen, 1999). According to Sen (1999), “the prevalence of corruption is rightly regarded as one of the major stumbling blocks in the path to successful economic progress, for example in many Asian and African countries” (p. 275). Dudley (2000) estimates that 30% of the money spent annually for international development loans are diverted from productive pursuits because of corruption. Additionally, countries perceived as being corrupt suffer from lower (private) capital inflows, as foreign investors are deterred by corruption and its associated phenomena, which include bureaucratic red tape, mismanagement and the lack of secure property rights (Transparency International (TI), 2004). Overall, the cost of corruption represents 5% of the volume of total global output or more than 1.5 trillion dollars a year according to “rough, but conservative” World Bank estimates (United Nations, 2003c). Table 1 aims to illustrate the scale of political corruption by presenting estimates of the funds allegedly embezzled by 10 notorious (but not necessarily the most corrupt) leaders of the last 20 years.

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