Title

Corrupt clubs and the convergence hypothesis

Author Affiliation

Naved Ahmad is Associate Professor of Economics at Institute of Business Administration (IBA), Karachi

Faculty / School

Faculty of Business Administration (FBA)

Department

Department of Economics

Was this content written or created while at IBA?

Yes

Document Type

Article

Source Publication

Pakistan Development Review

ISSN

0030-9729

Abstract

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.

Indexing Information

HJRS - Y Category, Scopus

Publication Status

Published

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