This document provides a summary of a journal article analyzing the relationship between bribery and economic growth. The journal article was published on March 1, 2010 in the Indian Journal of Economics & Business. It uses statistical analysis of corruption perception index and GDP data from 20 countries over 12 years to examine the bidirectional relationship between bribery and economic growth. The results in the journal found that bribery and economic growth impact each other both unidirectionally and simultaneously, with the impact of lower bribery on growth being stronger.

1. Journal Analysis
Relationship between bribery and
Economic Growth-An Empirical analysis
Published in March 1st 2010

2. Journal Details
• Indian Journal of Economics & Business
• Started in 2002.
• It is published at least 2 times per year.
• Double Refereed International Journal
• Managed by 20+ Associate Editors & 15 +
Editorial Advisory board.
.

3. Index of the Journal
• Introduction.
• Defining Bribery and Bribery in International
Business.
• Review of Extant literature.
• Theoretical Framework.
• Data and Methodology.
• Result and Analysis.
• Policy and Implication Limitations.
• Conclusions.

4. Introduction
• Focus of this paper
• If the level of bribery in a country affects the
rate of its economic growth
• If the rate of economic growth in a country
affects the level of bribery in that country.

5. Defining Bribery and Bribery in
International Business
• Definition of Bribery.
• The growth in international trade and relative
increase in bribery.
• Seriousness of Bribe taking has forced
organizations control and discourage bribe
taking

6. Review of Extant literature
• Determinants of bribery
• Determinants of economic growth.
• Formula by the World Bank
C = M + D-A-S
– C for corruption,
– M for monopoly,
– D for discretion
– A for accountability
– S for salary

7. Theoretical Framework
• Studies unequivocally show that bribe taking is much lower in countries
with high incomes.
• Prevalence of high levels of bribery retard economic growth.
• High levels of economic growth will reduce the prevalence of bribery.
• Bribery and economic growth can exist concurrently. Bribery prevents
incomes from rising and rising incomes reduce the prevalence of bribery.

8. Data and Methodology.
• Level of bribery is measured by the Corruption
Perception Index (CPI).
• Level of Economic Growth is measured by
Gross Domestic Product (GDP).
• GDP was collected for 20 countries over a 12
year period from IMF.
• CPI was collected over the three years from a
wide variety of sources
(www.transparency.org)

9. Result and Analysis
• Two statistical treatments.
– Two sets of regression analysis were run on each
of the two variables for country specific data and
for the entire data taken together to test for two-
way causality.
– In one regression, CPI was the dependent variable;
in the other GDP was the dependent variable.
• Results are available in the Journal.

10. Policy and Implication Limitations
• Every country needs to be assessed on its own particularities for business and investment purposes
• General businesspersons may expect to encounter low levels of bribery in high income countries .
• In formulating strategies for economic growth, policy makers need to tailor them to the specific
economic and social conditions of the specific country
• Even if bribery is eradicated may not be enough to stimulate higher levels of economic growth if
other barriers to trade and investment are not dismantled.
• Rapid economic growth should not relax the authorities from seeking to keep bribery under
control.
• The evidence is that in some cases, economic growth can lead to continued bribery.

11. Conclusions
• Bribery and economic growth impact each
other both unidirectionaly and simultaneously
• The impact of lower levels of bribery on
economic growth is stronger.
• There may not exist any relationship among
these two variables in some countries.

12. Thank You
Questions?