Reports reveal inverse relationship between growth and corruption

November 09, 2014, Sunday/ 17:46:49/ İSA SEZEN / ISTANBUL 

Several studies have indicated that economic growth rates decrease in countries where corruption prevails or where the public's perception is that politicians are involved in bribery-related practices.

After Turkey was deeply shaken by media reports informing the public about corruption and bribery investigations that included high government officials and prominent businessmen on Dec. 17 and 25 of last year, international studies on corruption and its effects on economic activities came to the public agenda once again. Numerous reports, including one from the United Nations, show that corruption and bribery in a country have a correlation to a decrease in growth rates.

The results of various studies indicate that as more public money is spent in areas that are vulnerable to corruption or bribery, the economic growth rate decreases.

A report published in the latest edition of the quarterly magazine of the Court of Accounts by Professor Ömer Yılmaz and his team at Ataturk University's economics department states that countries should take the necessary measures to fight corruption if they need higher economic growth rates. The report, which examines corruption perception indices in EU and Organization for Economic Co-operation and Development (OECD) countries between 2005 and 2012, emphasizes that any decline in the corruption perception index positively affects economic growth. The report also highlights that a shift of public expenditures from education, health or infrastructure to some areas which are more vulnerable to corruption yields negative results on economic growth.

Another study carried out by the UN Economic and Social Commission for Asia and the Pacific (ESCAP), concluded that a 1 percent decrease in the corruption perception index, meaning 1 percent decrease in corruption in a country, led to an increase in investments to that country of more of than 1 percent.

A study conducted by the economics department at Hong Kong Baptist University indicated that a 1 percent increase in the corruption level of a country leads to a 0.72 percent decrease in the growth rate.

Furthermore, a political science professor at the University of Missouri, A. Cooper Drury, who separated nations into democratic and nondemocratic categories for his research examining data from between 1982 and 1997 for 100 countries states that economic growth in nondemocratic countries suffers considerably as a result of corruption.

Meanwhile, a recent survey released by the Pew Research Center on Thursday showed that worry about corruption in Turkey has surged 25 percent since 2007.

According to the report, 37 percent of Turkish citizens labeled corruption a ‘'very big problem'' for the country in 2007; however the figure has jumped this year to 62 percent. Pew's survey was conducted in 34 emerging and developing countries with 38,620 respondents between March and June of this year.

Source: http://www.todayszaman.com/business_reports-reveal-inverse-relationship-between-growth-and-corruption_363955.html