CAUSALITY DYNAMICS OF CORRUPTION AND ECONOMIC GROWTH IN AN EMERGING ECONOMY

Abstract

Leveraging on the Ibrahim Index of African Governance (IIAG) and economic growth rate data from the World Bank (WB), this study employs a robust VAR time series methodology in delineating the relationship between corruption and economic growth in Zimbabwe. Noting the worsening corruption levels coupled with a grim economic performance, this study informs policy for the new political administration keen to fight corruption. The study affirms a unidirectional causality flowing from corruption to economic growth and a negative impulse response. To increase the fortunes of the economy in the future, current action to ‘stop’ corruption is obligatory.