Effects of corruption on economic growth in Kenya
Lwamba, Alex Moi
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This paper empirically investigates the effect of corruption on economic growth in Kenya using Ordinary Least Squares estimation method. Before estimation, unit roots were tested in the time 'series data from 1975- 2008 using Augmented Dickey Fuller tests. The tests indicate that corruption, GDP per capita income, foreign direct investment and population growth are integrated of order one i.e. [1(1)]. The OLS estimates show that the effect of corruption on economic growth is indeed negative and statistically significant. From the period 1975-2008, the result indicates that by increasing one unit of corruption perception index, the level of GDP per. capita increases by 0.622051. On the other hand, a unit increase in corruption perception index results into 0.639323 increase in the growth rate of GDP per capita income. From the policy perspective, efforts should be made to discourage corruption.