Research on the impact of public debt and corruption on economic growth in countries around the world - 25

- DEBT is the ratio of NC/GDP (data according to IMF and WB);

- T is the NC threshold

countries

25

Fincke and Greiner (2015a)

Economics and Business Letters , 4 (4), 27-45

7 developed countries (Austria, France, Germany, Italy, the Netherlands, Portugal and the USA) from 1970-

2012 the

௜ ,௧ − quang ௜,௧ି௤

= ߶ ଴ + ܾ ߰ ௜,௧ି௤

+ ෍ Ͷ ௝ lanh​

௝

In there:

- y is real GDP of the country, log, q is the 1-year, 3-year and 5-year rolling average.

- b is the public debt/GDP ratio

- C is a set of control variables including real GDP at the beginning of the period, Trade openness, Government consumption expenditure/GDP, inflation, population ratio.

POLS, FE, RE,

1. Public debt has a negative impact on economic growth for the 1-year, 3-year and 5-year periods.

2. No evidence of a nonlinear relationship between public debt and economic growth is found.

Fincke and Greiner

8 emerging countries (Brazil, India, Indonesia, Malaysia, Mexico, South Africa, Thailand and Turkey)

from 1980 to 2012

௜ ,௧ − quang ௜,௧ି௤

= ߶ ଴ + ܾ ߰ ௜,௧ି௤

+ ෍ Ͷ ௝ ܼ ௝,௜,௧ି௤ + ͝ ௜,௧

௝

In there:

- y is real GDP of the country, taken as log, q is the 3-year and 5-year non-slip average.

- b is the public debt/GDP ratio

- C is a set of control variables including real GDP at the beginning of the period, Trade openness, Government consumption expenditure/GDP, inflation, population ratio, investment/GDP ratio.

FE, RE

1. Public debt has a positive impact on economic growth in

(2015b)

both 3 year and 5 year periods.

South African

2. Results support the income convergence hypothesis

Journal of

conditional

Economics 83(3),

357-370

27

Nguyen Van Bon

60 countries are

௜௧ − quang ௜,௧ିଵ = ͙ ௜௧ + ͚ ଴ ௜ ,௧ ିଵ

DGMM

1. The relationship between public debt and inflation is a negative relationship.

(2016); Thesis

developed since year

+ ܺ ௜௧ ߚ ᇱ

ଵ

2-way. Public debt has a positive impact on inflation.

PhD in Economics

1990 to year

+ ܼ ௜௧ߚ ᇱ+ ߨ ௜

ଶ

Inflation and inflation have a negative impact on public debt.

Ho Chi Minh City economy

2014

+ ߦ ௜௧

Thus, high public debt causes inflation while

In there:

High inflation can erode the real value of debt.

- y is real GDP;

labour.

- X includes debt variables

2. Overall sample GDP per capita

labor, inflation and future changes

Real and private investment have positive impact on

interaction between NC and inflation;

inflation while labor force, infrastructure

- Z is the control variable included

Floor and trade openness have negative effects.

is private investment, force

3. Overall sample private investment and openness

labor, government budget revenue

Trade has a positive impact on public debt.

government, infrastructure and openness

while real GDP per capita and

commerce.

Government revenue has a negative impact on debt.

labour.

4. Overall sample: the effects of public debt and

inflation to economic growth

Yin and Yang while their interaction increases

positive economic growth is significant

statistics. In addition, the effects of private investment

employment, government revenue, and trade openness

Trade to economic growth is also positive.

statistical significance on economic growth in the

developing countries in the world.

Kim et al. (2017);

Sustainability 2017

, 9 (3), 433

77 countries from

∆ݕ ௜௧

OLS

1. The interaction between public debt and corruption

1990 to

= ͚ ଴ log(quang ௜௧ିସ )

FE

is statistically significant. Or the effect of

2014

+ ߚ ଵlog൫FactoryFactoryFactory​​​

GMM

public debt to economic growth is considered

+ ͚ ଶ ۜ ,௧ିସ

as a function of corruption.

+  ଷ log൫lanhlanh​

2. In countries with high transparency or

∗ ܥ{{{{_{_{{ } } ௜,௧ିସ + ܼ ᇱ ܺ ௜ ,௧ିସ

+ ߩ ௜ + ߬ ௧ + ߝ ௜௧

In there:

- Δy = [log( yit ) - log( yit- 4)]/4

- y is real GDP

- Debt is the ratio of NC/GDP;

- Corruption is an index of perceived corruption (with a scale from 0->10, the larger the index

the less corruption);

Without corruption, public debt would contribute.

promote economic growth and vice versa.

3. Countries should consider corruption as an important factor in improving institutional quality to reduce the negative impact of public debt on economic stability.

4. The corruption threshold that changes the impact of public debt on economic growth from negative to positive for the overall sample is 5.4 and for the sample of developed countries is 8.2.

- Z is the control variable

including human capital, inflation,

Government size, openness

trade, budget deficit

book.

Jacobo and Jalile (2017);

Working papers of the

Department of Economics University of Perugia (IT)

16 Latin American countries from 1960 to 2015

௜௧​

= ͙ + ͚ ଵ lanh

+ ͚ ଶ lanh​​​

FE, IV

1. The relationship between public debt and economic growth is nonlinear.

2. The public debt threshold is found theoretically.

The Laffer curve is 64%/GDP and 71%/GDP.

3. Countries with democratic governments tend to have

direction showing higher TTKT speed.

28

Markus and Rainer (2018);

Int Econ Econ Policy (2018)

15:373–403

111 developed and developing countries from 1971 to 2010

݃݀݌݃

= ͚ ଴ + ͚ܺ ᇱ +  ଵ _{ quang ᇱ

+ ߚ ଶ ݃݋ݏݑݎ݁݀

+ ͚ ଷ lanh​

FE 2SLS GMM

Using the lag of public debt variable as a variable

1. The relationship between public debt and economic growth is not consistent across different groups of countries. In the Continental group, public debt has a negative impact on growth at levels above 75% of GDP. In the Liberal group, no effect is found. In the Nordic group, it is neutral for low public debt and negative at levels above 75%.

- GDP is the 5-year moving average economic growth rate measured by real GDP;

- X is a set of control variables including real GDP, population growth rate, foreign direct investment, trade openness, inflation, financial crisis variables (all taken at the beginning of the period);

-gov is the activity of the Government measured by the size of the Government and the Legal System & Property Rights (included in the world economic freedom index)

of the Fraser Institute)

tool

60% of GDP.

2. Countries with different GDP per capita have different relationships between R&D and economic growth. In poor, underdeveloped countries, public debt has a negative impact on long-term economic growth, while in rich countries, this relationship is positive.

3. Policy recommendations for countries must take into account a country's institutional framework.

Author name, year of publication, Journal

announce

Scope of research

rescue

Research model

Research methods

Research results

1

Mauro, P. (1997);

IMF Working Paper, 96/98 , 1-28

67 countries from 1960 to

1985

No model presented Variables mentioned include:

- Real GDP growth rate

- Corruption index, average of ICRG and BI (Business International)

- Real GDP of the country in 1960

- Investment

- Secondary school graduation rate

- Population growth rate

- OLS

- 2SLS – Two-

stage least squares

1. Corruption negatively impacts economic growth by reducing private investment and through various types of government spending.

2. Corruption and Government Spending on Education

sex are inversely related.

3. The government should consider restructuring spending to reduce corruption.

2

Tanzi. and Davoodi (1998);

IMF Working

68 OECD countries

and developing countries since

No model shown

In there:

- Variables representing TTKT

OLS

By holding other variables constant, the author considers

examine the impact of each pair of corruption and dependent variables.

Paper. WP/97/139

1980 to year

including Public investment,

1. Corruption reduces economic growth

1995

Government Revenue,

through increased public investment spending and reduced efficiency

Operating & Maintenance

public investment results

expenditure, Quality of

2. Corruption reduces growth when it is present.

Infrastructure, Quality of

combination of increased public investment and regular expenditure

Roads

regularly, especially increasing salary expenditure.

- Variables representing the parameters

3. Corruption reduces growth through

ICRG members

the deterioration of infrastructure.

BI;

4. Corruption reduces growth through

reduction in government revenue to finance

for expenses.

5. Economists should refrain from exaggerating the cost

investment especially for countries with high levels of participation

high corruption and corruption problems for the

Senior leadership also needs to be considered.