Effect of Corruption on Socio-economic Development: Evidence from South Asia

Farzana Alamgir and Sakib B. Amin

Corruption creates friction in the economic system and acts as a barrier to economic development and progressive social change of an economy. However, there exists conflicting views in literature regarding the effect of corruption on development. The purpose of our study is to investigate the effect of corruption on the economic as well as social development of an economy. Based on a sample of four countries in South Asia, namely, Bangladesh, India, Pakistan and Sri Lanka for the period 1995-2015, and using the Vector Error Correction (VEC) model and panel cointegration technique, we show that there is a negative relationship between corruption and socioeconomic development in the South Asian region.

DOI : https://doi.org/10.21102/irbrp.2018.09.142.08