It is clear to every citizen that the level of corruption in the country is high. It's found in every sector of society. Be it a small or big sector, there is every possibility of observing corrupt practices when critically examined.
Corruption is considered a strong constraint on growth and development. The academic literature, however, finds different effects of corruption on economic performance. Other papers argue that corruption only reduces economic performance.
This is due to rent seeking, an increase of transaction costs and uncertainty, inefficient investments, and misallocation of production factors Murphy et al.
A third stream finds ambiguous effects of corruption can be illustrated with respect to public finances in new EU member states. Hanousek and Kocenda show that reductions in corruption either increase or decrease public investment, depending on the country and its institutions.
On the other hand, improvements in the corruption environment are mostly associated with better fiscal performance decreases in the deficit as well as debt. New research In a recent paper Hanousek and Kochanovawe attempt to provide an explanation of the divergent effects found in the previous literature.
To identify this relationship is not an easy task, since bribery and firm performance can influence each other through other unobservable factors. In addition, it is difficult to have good quality data on both corruption and firm financials. Therefore, we use firm economic performance data from the Amadeus database, and enrich them with the information on bribery practices from BEEPS.
Within those markets we compute the mean and dispersion of individual firm bribes, and assign them to every firm from Amadeus belonging to the same cluster. Given that we cannot observe firm-specific bribery practices, these two measures are the best way to characterise local bribery environments.
The mean of firm bribery proxies the equilibrium level of bureaucratic corruption.
We find that the ambiguous consequences of corruption found in previous studies could be explained by divergent effects of the mean and dispersion of corruption. In particular, a higher bribery mean retards both the real sales and the labour productivity growth of firms.
This is generally consistent with the existing firm- and macro-level empirical research. In contrast, a higher bribery dispersion of individual firm bribes facilitates firm performance see Figure 1.
This implies that in more dispersed local bribery environments at least the majority of bribing firms receives preferential treatment from public officials, which allows them to grow fast.
Their non-bribing or less frequently bribing competitors are likely more efficient in production and growth and are better at complying with bureaucratic regulations, as otherwise they would be displaced from the market.
In less dispersed bribery environments all firms bribe in a similar way. Bribery acts as an additional fee, or an increase in operational costs that only impedes firm performance. Average bribery mean and dispersion effects on the sales and productivity growth of firms Note: We also find that the effects from bureaucratic corruption are larger in the case of labour productivity growth, suggesting that bribery affects the employment structure of firms.
In highly corrupt environments, firms likely employ a non-optimal higher number of workers due to a misallocation of talent, in accordance with Murphy et al. Some employees may be engaged in unproductive activities such as searching for ways to circumvent bureaucratic constraints.
It may also be the case that the corrupt local government does not allow firms to dismiss workers in order to keep high employment figures in the region and loyal voters.Former Senate President, Ken Nnamani, on Wednesday, identified corruption as one of the major challenges hindering the economic development of the country.
Nnamani, who is now the chairman, National Steering Committee, African Peer Review Mechanisation (APRM), made this .
Nov 25, · When Nigerians keep on shifting the country’s currency to foreign countries, there will be less economic development in Nigeria. National Crises.
So many crises in Nigeria today are as a result of corruption. The insecurity in Nigeria brought about by Boko Haram is a consequence of schwenkreis.coms: CORRUPTION:: A HINDRANCE TO NATIONAL DEVELOPMENT.
Corruption is the bane of underdevelopment in Africa in general and Nigeria in particular. educated and uneducated; leaders and the led All hands must be on deck to fight corruption and return development, integrity and honesty to Nigeria.
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development potential of any country. The study investigated the impact of corruption on economic development in Nigeria. Secondary data were sourced from World Bank reports on Nigeria and corruption reports from transparency international on Nigeria.
The data were analysed using the Ordinary Least Square (OLS) regression technique. the study looked at the relationship between corruption and the Nigerian economic growth. However, the study introduces a new perspective on the role of corruption in economic growth and provides quantitative estimates of the impact of corruption on the economic growth in .