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Research Article |

Nexus Between Corruption and Economic Growth in Ethiopia: An Auto Regressive Distributed Lag Bounds Test Method

Ethiopian economic growth and corruption were examined over the long and short terms using annual time series data from 1996 to 2021. After taking into consideration human capital and the public sector, it has expanded Solow's (1956) neoclassical model of economic growth to include corruption by using a particular functional form for the entire factor of productivity. government spending on education, total fixed capital formation, and public spending. The Auto-Regressive Distributed Lag Bounds Test has been used to investigate the possibility of an ongoing relationship between corruption and real GDP per capita. The findings of the co-integration test confirmed the presence of a sustained correlation between corruption, real GDP per capita, and other variables influencing real GDP per capita. According to long-term evaluations, corruption has a significant impact on real GDP per capita. Real GDP was positively and significantly impacted by public investment in education, spending by governments on finances, and the creation of gross fixed assets. Model for Error Correction: The imbalance brought on by the shock of the previous year converges to the long-run equilibrium in the current year at a rate of -52%. The policy conclusion is that to ensure robust economic growth, Ethiopian governments at all levels need to develop efficient systems for combating corruption.

Corruption, Granger Causality, Gross Fixed Capital Formation, Real GDP Per Capita

APA Style

Tadewos, T., Kuma, B. (2024). Nexus Between Corruption and Economic Growth in Ethiopia: An Auto Regressive Distributed Lag Bounds Test Method. Economics, 13(1), 1-11. https://doi.org/10.11648/j.eco.20241301.11

ACS Style

Tadewos, T.; Kuma, B. Nexus Between Corruption and Economic Growth in Ethiopia: An Auto Regressive Distributed Lag Bounds Test Method. Economics. 2024, 13(1), 1-11. doi: 10.11648/j.eco.20241301.11

AMA Style

Tadewos T, Kuma B. Nexus Between Corruption and Economic Growth in Ethiopia: An Auto Regressive Distributed Lag Bounds Test Method. Economics. 2024;13(1):1-11. doi: 10.11648/j.eco.20241301.11

Copyright © 2024 Authors retain the copyright of this article.
This article is an open access article distributed under the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/) which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

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