Corruption And Economic Growth

Corruption is hinders economic development and political stability of a country’s enemy, and causes huge economic losses to the state and society. According to statistics, since the1990s, the social and economic losses caused by corruption of the average share of14.5%-14.9%of GDP per year, The loss amount as much as$200billion, and there are a further upward trend. But at the same time economic has grown at a rate of10%per year on average, the gross national product ranked second, real GDP per capita reaches the mid-level of industrialization.The paradox of coexistence of our country high corruption and high economic growth has been plagued by academia.Research on corruption, a lot of research results at home and abroad. However, most people were analyzed from the perspectives of politics, sociology and so on, and especially the corruption of the influence of social and political life, and put forward a series of measures for the prevention and control of corruption, but the research on the relationship are few. Since the1990s, with the establishment of various corruption indices, empirical research on corruption and economic growth gradually increased, domestic and foreign scholars to study the relationship between corruption and economic growth from a different perspective, presented their different point of view, but more meticulous research perspective, greatly enriched the empirical study of corruption and economic growth. However, due to measure the level of corruption are different, and these standards have defects, which makes scholars study concluded have a big difference, especially when a country’s specific conditions for their theory is big limitations, the conclusion is quite different, making it difficult to convince. About the " double paradox ", the phenomenon of coexistence of high corruption and high economic growth, which is a new problem for us. Traditional economic theory can not provide a reasonable explanation, Western scholars had to defer to China’s economic reform known as the "lucky hit". Obviously this statement is difficult convincing. Whether China’s economy is deviated from the traditional economic growth theory? Corruption is to promote the economic growth or hindered the economic growth? This is our problem which needs to be solve and answer.Therefore, we use our provincial panel data, in reference to previous studies, on the basis of combing the previous scholars research about corruption, combined with China’s specific national conditions, in the economic transition period in China was analyzed the reason of frequent corruption, and using the econometric model to the relationship between corruption and economic growth in China to do the empirical analysis, and then combined with the reality of our country to explain the results of regression, accordingly puts forward policy suggestions. The main conclusions are as follows:First, the corr coefficient is0.186, significant at the0.01level, corruption increase an unit, the economic growth rate will rise0.186%.Which show that the impact of corruption on economic growth is positive. The corr2coefficient is0.117, significant at the0.01level, along with the further deepening of the degree of corruption, corruption will have a negative impact on economic growth in China. There is inverted u-shaped relationship between corruption and economic growth, namely the kuznets effect. When corruption is0.794, economic growth is maximized. In China, the current level of corruption is0.361, indicating that corruption has not played a deterrent. However, this does not mean that our country reach the kuznets curve inflection point still have a long time, because this article uses provincial panel data. So we assume a premise of the political stability and legal system perfect. Therefore, once the corruption of the legal system so ineffective, causing great instability in the country’s political, then the turning point will come immediately, but if the problem of corruption is not effectively curbed, then China’s economy will show a linear decline.Second, in order to examine corruption in our country there are regional differences in the influence of economic growth, this article put30areas in China are divided into east and Midwest. We does corruption on economic growth of China’s eastern and western regions of the existence of differences. The eastern region, as long as the level of corruption is lower than0.589, the impact of corruption on economic growth is positive. However, the central and western regions, the level of corruption is lower than1.015, which play a positive impact. Corruption impact on economic growth in eastern range less than the Midwest, the east lead to reach a turning point. We expect that this may be related to the reform process of our country. Because our country in the process of reform and opening up the coast before the layout of the interior, lead to the difference in degree of regional marketization. In contrast, more perfect than the eastern Midwest market mechanisms, economic openness is also higher, and thus lead to reach a turning point.Third, in order to examine the influence of the market on the degree and extent of corruption in China’s economic growth, we joined the market level and corruption and marketization degree of cross terms. Econometric regression results show that the degree of marketization will weaken the influence of corruption on economic growth, this confirms our expectations, that corruption in the eastern parts of the market mechanism to be more perfect than the influence of the central and western regions. Corruption and the degree of marketization of cross terms coefficient is-1.812, significant at the0.01level, which indicates the degree of improvement in the market to some extent weaken the positive effect of corruption on economic growth.Although empirical research of this paper confirmed that under the background of China’s specific system, corruption has a promoting effect on economic growth, but that doesn’t mean corruption, because corruption caused by the social and economic costs cannot be estimated, and also affect the political stability of a country. So, when we formulate national development strategy, from a long-term point of view, we can not because of corruption to some extent contribute to economic growth, it condone any breed corruption; we can not because of corruption temporary gains while ignoring the huge costs to society caused by corruption. Overall, the impact of corruption is very bad, it will make the people lose confidence in a country’s rulers and economic growth can not be sustained.Moreover, the paper selects the number of corruption cases per capita as a measure of the extent of corruption, although there are some reasonable, but this indicator reflects the respect and from the anti-corruption efforts in a region. Thus, to some extent, corruption is promote economic growth, but rather that the government’s anti-corruption efforts to promote economic growth. Only in the development of China’s economy continues to strengthen anti-corruption efforts, to achieve low levels of corruption and the high rate of economic growth "double dividend".Finally, the regression results based on econometric models, the directionality of the anti-corruption strategy to make some policy recommendations. In the development of anti-corruption policy, to follow the prevention and punishment supplemented by the principle, to learn from the advanced experience of developed countries and combining our specific conditions, can’t blindly follow the practice of other countries.