Corruption and inequality of income in Madagascar: study of canal effects of economic growth
- Country : Madagascar
- Subject : Economic Sciences
The objective of this work is to study the direct and indirect effects of corruption on income inequality in Madagascar from the 2002-2014 period. For direct effects, we used a two-stage model. First, a construction of a simple linear regression model where GDP per capita is an independent variable and corruption (rank of the country) the explanatory variable. The result of the model showed that a drop in ranking rank (relatively linked to a downgrade in the CPI) means a decrease in growth in GDP per capita. Next, we sought to estimate the indirect effects of corruption on income inequality. The introduction of other explanatory variables into this model, including spending on education and health and the ratio of tax revenue to GDP, confirmed that corruption is a negative contributor to economic growth. In other words, corruption negatively affects growth in GDP per capita.