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- Title
Impact of Crime and Corruption on GDP per capita An Empirical Analysis of Cross-Country Data.
- Authors
ul Islam, M. Muqeem; Hussain, Shahzad
- Abstract
Objective of this research is to inquire ways and means to enhance well-being of a society. Economy is one of the important dimensions of a society. Economic performance has direct relationship with the crime, law & order condition and corruption. In order to determine this phenomenon, paper's endeavor focuses on searching impact of crime rate, law & order condition, and rule of law on economic performance. This empirical studies utilizes PPP adjusted GDP per capita as proxy for economic performance. Nine (9) other variables have been utilized to represent crime, law & order conditions and corruption. This empirical study applies regression analysis including and excluding outliers with 2% Mahalanobis distance. Study shows that out of nine (9) exogenous variables eight (8) variables exhibit β coefficients significant at 99% and 95% percent confidence intervals. While variable related to rate of murders per thousand inhabitant found inconsistent with theory. Plausible cause of diversion from theory is misreporting of offenses in less developed countries and higher prevalence of carnage in the transitional economies. Indicators depicting feeling safe on streets and rule of law show highest elasticity out of nine variables. Elasticity of GDP per capita with respect to Corruption Perception Index (CPI) is also ranked high and found significant. The study concludes that institutional reforms in crime and law & order related institutions will directly enhance favorable environment for economic activities like tourism, foreign direct investment, industrial growth and consumer confidence. Low crime rate also reduces cost of investment, cost of transaction and direct security-related cost.
- Subjects
CORRUPTION; GROSS domestic product; WELL-being
- Publication
Pakistan Journal of Criminology, 2018, Vol 10, Issue 2, p72
- ISSN
2074-2738
- Publication type
Article