Corrupt clubs and the convergence hypothesis
Faculty / School
Faculty of Business Administration (FBA)
Department of Economics
Was this content written or created while at IBA?
Pakistan Development Review
Geography | Social and Behavioral Sciences
Convergence is a tendency of lagging countries to grow faster than leading countries. Empirical work in rss-section framework demonstrates little or no support for absolute convergence in per capita GDP. The literature identifies several factors that determine the speed of convergence across heterogeneous group of countries. 1 argue in this paper that "divergence in corruption" (C-Divergence) as the tendency of corrupt countries to become more corrupt faster than less corrupt nations is a neglected factor that also determines the speed of convergence. Following the same methodology used in the convergence literature, I estimate using Tl corruption perceptions index C-o and C-γ coefficients for both corrupt and less corrupt economies to explore the C-divergence in corruption rankings. The study concludes that corrupt countries are indeed C-converging, forming a "corrupt club", and this helps explain why backward nations remain backward.
HJRS - Y Category, Scopus
Ahmad, N. (2006). Corrupt clubs and the convergence hypothesis. Pakistan Development Review, 45 (4), 1001-1009. Retrieved from https://ir.iba.edu.pk/faculty-research-articles/80