Corruption and growth in African countries : exploring the investment channel

Abstract

Using the Arellano-Bond GMM technique, we study the impact of corruption on public and private investment in African countries as a way of exploring one channel through which corruption undermines growth. The empirical results indicate that corruption affects income growth directly and through its impact on investment. The findings of this paper are informative on the role of corruption in undermining growth and reinforce the call for institutional reforms as a prerequisite for investment-led growth acceleration in Africa.