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Title: Corruption and economic growth: the case of Portugal
Authors: Bação, Pedro 
Gaspar, Inês
Simões, Marta C. N. 
Keywords: Corruption; Economic Growth; Portugal; VAR model; SVAR
Issue Date: 29-Oct-2019
Series/Report no.: CeBer Working Paper 2019-06;
Abstract: In this paper we investigate the impact of corruption on economic growth in Portugal over the period 1980-2018. The empirical approach makes use of a VAR model inspired by the standard CobbDouglas aggregate production function. The VAR model includes the capital stock, hours worked, total factor productivity and the corruption perceptions index (CPI) of Transparency International. The CPI combines several sources of information on the level of corruption in each country. The scale of this index goes from 0, the highest level of corruption, to 10, the lowest level. The magnitude of the estimated effect of corruption on economic growth in the unrestricted VAR model is large (and positive), but statistically not significantly different from zero. However, the results from the estimation of a structural VAR model with economically plausible long-run restrictions indicate modest gains from reducing corruption.
Rights: openAccess
Appears in Collections:I&D CeBER - Working Papers

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