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Corruption, Income Inequality and Poverty in Central and Eastern European Union Countries: A Panel Causality Analysis

Year 2017, Volume: 6 Issue: 6, 340 - 349, 27.11.2017

Yilmaz Bayar , Mahmut Unsal Sasmaz , Omer Faruk Ozturk

Abstract

The global
wealth has increased considerably and decreases in income inequality and
poverty have been experienced in the recent years. However, both income
inequality and poverty have still stayed at critical dimensions. This study
investigated the causal interaction among corruption, income inequality, and
poverty in Central and Eastern European Union transition economies during
2005-2016 period by employing panel causality test of Dumistrescu and Hurlin
(2012). The results revealed a one-way causality from poverty to corruption and
also a one-way causality from income inequality to poverty.


Keywords

Corruption income inequality poverty panel causality test

References

  • Ajisafe, R.A. (2016). Corruption and Poverty in Nigeria: Evidence from Ardl Bound Test and Error Correction Model. Journal of Emerging Trends in Economics and Management Sciences, 7(3), 156-163.
  • Begović, B. (2007). Economic Inequality and Corruption. Center for Liberal Democratic Studies, http://danica.popovic.ekof.bg.ac.rs/206.pdf (27.07.2016)
  • Breusch, T. S., Pagan, A.R. (1980). The Lagrange multiplier test and its applications to model specification tests in econometrics. Review of Economic Studies, 47(1), pp.239–53.
  • Chong, A., Calderon, C. (2000). Institutional Quality and Income Distribution. Economic Development and Cultural Change, 48, 761-786.
  • Dimant, E., Schulte, T. (2016). The Nature of Corruption: An Interdisciplinary Perspective. German Law Journal, 17(1), 53-72.
  • Dincer, O.C., Gunalp, B. (2008). Corruption, Income Inequality, and Poverty in the United States. FEEM Working Paper No. 54.2008 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1158446 (05.08.2017)
  • Dobson, S., Ramlogan-Dobson, C. (2014). Why is Corruption Less Harmful to Income Inequality in Latin America? World Development, 40(8), 1534–1545. http://dx.doi.org/10.1016/j.worlddev.2012.04.015
  • Dumitrescu, E., Hurlin, C. (2012). Testing for Granger non-causality in heterogeneous panels. Economic Modelling, 29(4), 1450–1460, DOI: 10.1016/j.econmod.2012.02.014
  • Eurostat (2017a). S80/S20 income quintile share ratio by sex and selected age group - EU-SILC survey, http://appsso.eurostat.ec.europa.eu/nui/submitViewTableAction.do (28.09.2017)
  • Eurostat (2017b). People at risk of poverty or social exclusion, http://ec.europa.eu/eurostat/tgm/table.do?tab=table&plugin=1&language=en&pcode=tipslc10 (29.09.2017)
  • Gupta, S., Davoodi, H., Alonso-Terme, R. (2002). Does Corruption Affect Income Inequality and Poverty? Economics of Governance, 3, 23–45.
  • Hasman, J., Novotny, J. (2015). Cross-national Variation in Income Inequality and its Determinants: An Application of Bayesian Model Averaging on a New Standardized Inequality Data Set. Prague Economic Papers, 24(2), 211-224.
  • Haughton, J., Khandker, S.R. (2009). Handbook on Poverty+Inequality. Washington, World Bank. Ildırar, M., İşçan, E. (2015). Corruption, Poverty and Economic Performance: Eastern Europe and Central Asia Countries. International Journal of Economics and Finance Studies, 7(2), 27-41.
  • Kaufmann, D., Kraay, A., Mastruzzi, M. (2010). The Worldwide Governance Indicators : A Summary of Methodology, Data and Analytical Issues". World Bank Policy Research Working Paper No. 5430, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1682130
  • Li, H., Xu, L.C., Zou, H. F. (2000). Corruption, Income Distribution, and Growth. Economics and Politics, 12, 155-182.
  • Maddala, G. and Wu, S. (1999) A Comparative Study Of Unit Root Tests With Panel Data and a New Simple Test, Oxford Bulletin Of Economics and Statistics, pp.631 652.
  • Mehrara, M., Firouzjaee, B.A., Gholami, A. (2011). The Corruption and Income Distribution in OPEC and OECD Countries: A Comparative Study. International Journal of Economics and Research, 2(6), 51-61
  • Negin, V., Rashid, Z.B.A., Nikopour, H. (2011). The Causal Relationship between Corruption and Poverty: A Panel Data Analysis. Journal of International Economic Review, 4(1), 23-38.
  • Odedokun, M.O., Round, J.I. (2004). Determinants of Income Inequality and its Effects on Economic Growth Evidence from African Countries. African Development Review, 16(2), 287-327. DOI: 10.1111/j.1017-6772.2004.00093.x
  • OECD (2014). CleanGovBiz Integrity in practice. https://www.oecd.org/cleangovbiz/49693613.pdf (25.08.2017)
  • Olken, B.A., Pande, R. (2012). Corruption in Developing Countries. Annual Review of Economics, 4, 479-509.
  • Pesaran, M. H. (2004). General diagnostic tests for cross section dependence in panels. CESifo Working Papers No.1233, 255–260.
  • Pesaran, M. H., Yamagata, T. (2008). Testing slope homogeneity in large panels. Journal of Econometrics, 142(1), pp.50–93, DOI: 10.1016/j.jeconom.2007.05.010
  • Pesaran, M.H., Ullah, A., Yamagata, T. (2008). A bias-adjusted LM test of error cross-section independence. Econometrics Journal, 11(1), pp.105–127, DOI: 10.1111/j.1368-423X.2007.00227.x
  • Transparency International (2017). What is Corruption?, https://www.transparency.org/what-is-corruption (23.08.2017)
  • Ullah, M.A., Ahmad, E. (2016). Inequality and Corruption: Evidence from Panel Data. Forman Journal of Economic Studies, 12, 1-20.
  • World Bank (2017). Worldwide Governance Indicators, http://info.worldbank.org/governance/wgi/#home

Orta ve Doğu Avrupa Birliği Ülkelerinde Yolsuzluk, Gelir Dağılımı Eşitsizliği ve Yoksulluk: Panel Nedensellik Analizi

Year 2017, Volume: 6 Issue: 6, 340 - 349, 27.11.2017

Yilmaz Bayar , Mahmut Unsal Sasmaz , Omer Faruk Ozturk

Abstract

Son yıllarda küresel servet önemli miktarda artmış, gelir dağılımı
eşitsizliği ve yoksullukta düşüşler görülmüştür. Bununla birlikte hem gelir
dağılımı eşitsizliği hem de yoksulluk hala ciddi boyutlarda bulunmaktadır. Bu
çalışma Dumitrescu ve Hurlin (2012) panel nedensellik testini kullanarak Orta
ve Doğu Avrupa bölgesindeki Avrupa Birliği geçiş ekonomilerinde 2005-2016
döneminde yolsuzluk, gelir dağılımı eşitsizliği ve yoksulluk arasındaki
nedensel etkileşimi araştırmaktadır. Çalışma sonucunda yoksulluktan yolsuzluğa
ve gelir dağılımı eşitsizliğinden yoksulluğa doğru tek yönlü nedensellik
belirlenmiştir.

Keywords

Yolsuzluk gelir dağılımı eşitsizliği yoksulluk panel nedensellik testi

References

  • Ajisafe, R.A. (2016). Corruption and Poverty in Nigeria: Evidence from Ardl Bound Test and Error Correction Model. Journal of Emerging Trends in Economics and Management Sciences, 7(3), 156-163.
  • Begović, B. (2007). Economic Inequality and Corruption. Center for Liberal Democratic Studies, http://danica.popovic.ekof.bg.ac.rs/206.pdf (27.07.2016)
  • Breusch, T. S., Pagan, A.R. (1980). The Lagrange multiplier test and its applications to model specification tests in econometrics. Review of Economic Studies, 47(1), pp.239–53.
  • Chong, A., Calderon, C. (2000). Institutional Quality and Income Distribution. Economic Development and Cultural Change, 48, 761-786.
  • Dimant, E., Schulte, T. (2016). The Nature of Corruption: An Interdisciplinary Perspective. German Law Journal, 17(1), 53-72.
  • Dincer, O.C., Gunalp, B. (2008). Corruption, Income Inequality, and Poverty in the United States. FEEM Working Paper No. 54.2008 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1158446 (05.08.2017)
  • Dobson, S., Ramlogan-Dobson, C. (2014). Why is Corruption Less Harmful to Income Inequality in Latin America? World Development, 40(8), 1534–1545. http://dx.doi.org/10.1016/j.worlddev.2012.04.015
  • Dumitrescu, E., Hurlin, C. (2012). Testing for Granger non-causality in heterogeneous panels. Economic Modelling, 29(4), 1450–1460, DOI: 10.1016/j.econmod.2012.02.014
  • Eurostat (2017a). S80/S20 income quintile share ratio by sex and selected age group - EU-SILC survey, http://appsso.eurostat.ec.europa.eu/nui/submitViewTableAction.do (28.09.2017)
  • Eurostat (2017b). People at risk of poverty or social exclusion, http://ec.europa.eu/eurostat/tgm/table.do?tab=table&plugin=1&language=en&pcode=tipslc10 (29.09.2017)
  • Gupta, S., Davoodi, H., Alonso-Terme, R. (2002). Does Corruption Affect Income Inequality and Poverty? Economics of Governance, 3, 23–45.
  • Hasman, J., Novotny, J. (2015). Cross-national Variation in Income Inequality and its Determinants: An Application of Bayesian Model Averaging on a New Standardized Inequality Data Set. Prague Economic Papers, 24(2), 211-224.
  • Haughton, J., Khandker, S.R. (2009). Handbook on Poverty+Inequality. Washington, World Bank. Ildırar, M., İşçan, E. (2015). Corruption, Poverty and Economic Performance: Eastern Europe and Central Asia Countries. International Journal of Economics and Finance Studies, 7(2), 27-41.
  • Kaufmann, D., Kraay, A., Mastruzzi, M. (2010). The Worldwide Governance Indicators : A Summary of Methodology, Data and Analytical Issues". World Bank Policy Research Working Paper No. 5430, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1682130
  • Li, H., Xu, L.C., Zou, H. F. (2000). Corruption, Income Distribution, and Growth. Economics and Politics, 12, 155-182.
  • Maddala, G. and Wu, S. (1999) A Comparative Study Of Unit Root Tests With Panel Data and a New Simple Test, Oxford Bulletin Of Economics and Statistics, pp.631 652.
  • Mehrara, M., Firouzjaee, B.A., Gholami, A. (2011). The Corruption and Income Distribution in OPEC and OECD Countries: A Comparative Study. International Journal of Economics and Research, 2(6), 51-61
  • Negin, V., Rashid, Z.B.A., Nikopour, H. (2011). The Causal Relationship between Corruption and Poverty: A Panel Data Analysis. Journal of International Economic Review, 4(1), 23-38.
  • Odedokun, M.O., Round, J.I. (2004). Determinants of Income Inequality and its Effects on Economic Growth Evidence from African Countries. African Development Review, 16(2), 287-327. DOI: 10.1111/j.1017-6772.2004.00093.x
  • OECD (2014). CleanGovBiz Integrity in practice. https://www.oecd.org/cleangovbiz/49693613.pdf (25.08.2017)
  • Olken, B.A., Pande, R. (2012). Corruption in Developing Countries. Annual Review of Economics, 4, 479-509.
  • Pesaran, M. H. (2004). General diagnostic tests for cross section dependence in panels. CESifo Working Papers No.1233, 255–260.
  • Pesaran, M. H., Yamagata, T. (2008). Testing slope homogeneity in large panels. Journal of Econometrics, 142(1), pp.50–93, DOI: 10.1016/j.jeconom.2007.05.010
  • Pesaran, M.H., Ullah, A., Yamagata, T. (2008). A bias-adjusted LM test of error cross-section independence. Econometrics Journal, 11(1), pp.105–127, DOI: 10.1111/j.1368-423X.2007.00227.x
  • Transparency International (2017). What is Corruption?, https://www.transparency.org/what-is-corruption (23.08.2017)
  • Ullah, M.A., Ahmad, E. (2016). Inequality and Corruption: Evidence from Panel Data. Forman Journal of Economic Studies, 12, 1-20.
  • World Bank (2017). Worldwide Governance Indicators, http://info.worldbank.org/governance/wgi/#home
There are 27 citations in total.

Details

Journal Section Articles
Authors

Yilmaz Bayar 0000-0002-6776-6524

Mahmut Unsal Sasmaz 0000-0001-9485-3933

Omer Faruk Ozturk 0000-0003-0250-5021

Publication Date November 27, 2017
Published in Issue Year 2017 Volume: 6 Issue: 6

Cite

APA Bayar, Y., Sasmaz, M. U., & Ozturk, O. F. (2017). Orta ve Doğu Avrupa Birliği Ülkelerinde Yolsuzluk, Gelir Dağılımı Eşitsizliği ve Yoksulluk: Panel Nedensellik Analizi. İnsan Ve Toplum Bilimleri Araştırmaları Dergisi, 6(6), 340-349. https://doi.org/10.15869/itobiad.358432
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