Document Type
Article
Publication Date
2017
Abstract
Income per-capita is a measure of economic well-being. Through its effect on economic development, it can indirectly affect sustainable development. Hence, it is essential to study the determinants of Income per-capita Level. Recently, corruption level has played an influential role in determining income per-capita. However, theoretically and empirically its effect is still debatable. Besides the traditional determinants of income per-capita, the effect of corruption on Income percapita level is examined in a sample of developing countries between1996-2013. There is a potential endogeneity problem that arises from the two way relationship between corruption and income per capita levels which threatens internal validity. Accordingly, an instrumental variable (IV) in a two stage least squares (2SLS) estimation is conducted. The results indicate its presence. Furthermore, the results show that corruption is a significant determinant of income per-capita level in developing countries. Policy implications to promote governance which in turn affect sustainable development are also given.
Recommended Citation
Hassaballa, H. (2017). Studying the effect of corruption on income per-capita level in an IV estimation in developing countries, European Journal of Sustainable Development, 6 (1), 57-70. Indexed in the Emerging Sources Citation Index of Thomson Reuters.