Examining the impact of corruption on economic growth southern Africa development community

Abstract

This work examines the impact of corruption on economic growth in the Southern Africa Development Community (SADC) region over the period 1995-2003. Literature suggests that corruption may counteract government failure and promote economic growth given exogenously determined suboptimal bureaucratic rules and regulations. However, other studies suggest that corruption has detrimental effects on economic growth. The study uses Cross Country Regression Analysis to examine the impact of corruption on Economic growth. The findings reveal that there is a positive correlation between corruption perception index and growth. The findings suggest corruption has a detrimental impact on economic growth. Hence basing on the experience of countries that are least corrupt and have high levels of economic growth rates, the study recommends a holistic approach to deal with corruption. This can be done by redefining the role of government, improving the system of incentives and strengthen domestic institutions m order to make sure that necessary checks and balances are m place.