Corruption, Structural Reforms, and Economic Performance in the Transition Economies

48 Pages Posted: 2 Feb 2006

See all articles by George T. Abed

George T. Abed

International Monetary Fund (IMF) - Fiscal Affairs Department

Hamid R. Davoodi

International Monetary Fund (IMF) - Fiscal Affairs Department

Date Written: July 2000

Abstract

Recent studies have highlighted the adverse impact of corruption on economic performance. This paper advances the hypothesis that corruption is largely a symptom of underlying weaknesses in public policies and institutions, a formulation that provides deeper insights into economic performance than do measures of perceived corruption. The hypothesis is tested by assessing the relative importance of structural reforms vs. corruption in explaining macroeconomic performance in the transition economies. The paper finds that for four widely used measures of economic performance - growth, inflation, the fiscal balance, and foreign direct investment - structural reforms tend to dominate the corruption variable.

Keywords: Corruption, structural reforms, transition economies

JEL Classification: D7, O1, P3

Suggested Citation

Abed, George T. and Davoodi, Hamid R., Corruption, Structural Reforms, and Economic Performance in the Transition Economies (July 2000). IMF Working Paper No. 00/132, Available at SSRN: https://ssrn.com/abstract=879906

George T. Abed (Contact Author)

International Monetary Fund (IMF) - Fiscal Affairs Department ( email )

700 19th Street, NW
Washington, DC 20431
United States

Hamid R. Davoodi

International Monetary Fund (IMF) - Fiscal Affairs Department ( email )

700 19th Street, NW
Washington, DC 20431
United States

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