Analyzing the Economic Costs of Corruption Using a Basic Keynesian Framework: Part 1

Authors

  • Juanito B. Aliño Jr. University of San Jose-Recoletos

DOI:

https://doi.org/10.32871/rmrj1301.02.01

Keywords:

corruption, corruption perception index, Keynesian framework, investment multiplier, government multiplier

Abstract

This study attempts to analyze the impact of corruption on the economy by adopting the Keynesian Framework. Current studies show that corruption has adverse effects on GDP, GDP growth rate, and investment, among others. Such studies, however, used the “economic cost-corruption perception index†model. An alternative model is to adopt a Keynesian framework incorporating corruption as a factor in the model. Utilizing the concepts of investment and government multipliers, the comparative analysis between the “withâ€-and-“without†corruption is used in analyzing the economic cost of corruption. The results show that government multiplier is less than the investment multiplier when there is corruption. Based on the theses/arguments, this study concludes that (a) when
there is corruption, the impact of government expenditure on the economy is less than the impact of investment expenditure on the economy, (b) the Keynesian model can enhance the explanatory power of the existing “economic cost-corruption perception index†model of analyzing the economic cost of corruption, and (c) the results of integrating corruption into the Keynesian model reveal that GDP and GDP growth rate are overestimated for countries with a certain proportion of government expenditure that go to corruption.

Author Biography

Juanito B. Aliño Jr., University of San Jose-Recoletos

is the Director of the Center for Policy, Research and Development Studies of the University of San Jose-Recoletos. Prior to that, he was a full time faculty teaching subjects on Economics, Statistics, Econometrics and Research. From 2005 to 2007, Dr. Aliño served as the Chair of the Department of Social and Behavioral Sciences. Before joining the academe, he was working for the Department of Environment and Natural Resources, Region 7 as a Senior Science Research Specialist and at the same time teaching at the University of San Carlos in the undergraduate level and in the graduate school. He is a consultant and serves as an Economic specialist to various companies in the country. Dr. Aliño has published extensively in the areas of economics, agriculture, marketing, governance and environment related studies. He has been conducting lectures on quantitative research development process and techniques, research skills capability enhancement, research and statistics to students and government officials. Dr. Aliño finished his A.B. Economics (cum laude) from the Colegio de San Jose-Recoletos obtained a Master of Science in Agricultural Economics degree from the University of the Philippines, Los Baños, Laguna and received his Doctor of Management in Human Resource Management from the University of San Jose-Recoletos.

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Published

2013-12-31

How to Cite

Aliño Jr., J. B. (2013). Analyzing the Economic Costs of Corruption Using a Basic Keynesian Framework: Part 1. Recoletos Multidisciplinary Research Journal, 1(2). https://doi.org/10.32871/rmrj1301.02.01

Issue

Vol. 1 No. 2 (2013)

Section

Articles

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