Corruption on the Global Front: Symposium Introduction

By Khumawala, Saleha | Journal of Public Budgeting, Accounting & Financial Management, Fall 2005 | Go to article overview

Corruption on the Global Front: Symposium Introduction


Khumawala, Saleha, Journal of Public Budgeting, Accounting & Financial Management


Mrs. Eveline Herfkens, then Netherlands Minister for Development Co-operation, stated at The Global Forum on Fighting Corruption and Safeguarding Integrity, May 31, 2001 at The Hague, Holland:

Corruption is a symptom of bad governance: it undermines democratic values and disturbs the development priorities of a country. Furthermore, corruption slows down sustainable economic growth by disrupting the distribution of scarce goods. Corruption exists everywhere but it does most harm in those areas where resources are already limited. Everyone must fight corruption, in the north as well as in the south, in the east as well as in the west.

This statement demonstrates the broad effect corruption has on all countries of the world. With less academic rigor, the media has been engaged in formulating various correlations between perceived levels of corruption and human development, competitiveness, judicial quality, credit ratings or the spread of newspapers. However, such correlations risk being misleading, in that they present spurious relationships. Thus academic research is sorely needed to determine the causes and consequences of corruption. Only through the use of rigorous methodologies will we develop a better understanding of what the causes and effects of global corruption are, and be able to conduct an informed discussion of possible solutions to this global problem. The four research papers and a thought piece on corruption examine not only different aspects of this issue but also its impact on various levels of the economy at the national and international front.

The paper by Ketkar, Murtuza and Ketkar establishes a statistically significant link between Transparency International's Corruption Perceptions Index (CPI) and foreign direct investment (FDI) flows to 54 developing and developed countries. In addition to each country's CPI, several location and economic characteristics are also postulated to influence FDI. For a group of 22 developing countries, the paper then simulates the impact of an improvement in the CPI score on FDI. …

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