High levels of corruption limit investment and growth and lead to Essay - 1

High levels of corruption limit investment and growth and lead to ineffective government. Discuss with reference to concrete examples - Essay Example iciency is being advocated at all levels ÃŽ ¿f .the world outlook has now transitioned from the sustenance ÃŽ ¿f regulated economies to a liberalization ÃŽ ¿f the world economy. It is in this regard that corruption, a relatively new phenomenon is gaining widespread importance in economic circles. What distinguishes corruption from other indictors is essentially the fact that it is non-quantifiable concept. While measures ÃŽ ¿f growth, education and access to health facilities are easily available, it is extremely difficult to actually assess the level ÃŽ ¿f underhand dealings in an economy. The lack ÃŽ ¿f concrete information makes any corruption measure largely susceptible to biases and subjectivity. To augment is, depending on the definition ÃŽ ¿f corruption for any single economy. Our project is aimed at waiving the problems encountered in comprehending the exact nature ÃŽ ¿f the relationship between corruption and economic development. To this effect .we have attempted to do the following: * Present a theoretical framework in which to view the effect ÃŽ ¿f corruption on growth; we have presented annotated summaries for acceptable theories about corruption. At the same time we have ventured to formulate our own hypotheses about the corruption-development relationship. * Test the theoretical base for empirical validity; By conducting a cross-sectional study we attempted to discern the practical significance ÃŽ ¿f corruption. For the purpose ÃŽ ¿f the best we formulated our own model ÃŽ ¿f economic development, using both theory and relevant econometric tools. In the wake ÃŽ ¿f this we have rejected and accepted several theories. Our study has also acquainted us with economic relationships which digress from our main analysis but which are nevertheless educating. We were able to discern a highly interesting relationship whereby corruption was found to be more relevant to economic development than to economic growth, leading to the conclusion that perhaps the level ÃŽ ¿f rent -seeking in