Poverty Literature Review

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2.2 The review of the literatures to support other channels through which corruption can affect poverty. There many previous literatures that support the other channels through which corruption affects poverty, this review will support the views presented in the research question. Eric Chetwynd, Spector. B and Francis Chetwynd, (2003) argued that Corruption cannot produce poverty directly. Instead, corruption has direct effect on economic and governance indicators, this direct effect in turn cause poverty. Therefore, the relationship between corruption and poverty examined here is an indirect one. Hence they developed two models; The “economic model” shows that corruption impact poverty by first affecting the economic growth indicators, which…show more content…
Corruption destroys the institutional ability of government to provide quality public services to the citizens, diverts public projects into business projects where there is kickbacks. Those holding public offices work hard to steal and loot public properties to create inequalities, putting government on pressure and increase budget. These practices resulted into poverty. I developed the third model called “The Social Model” to supplement the two models in the previous literatures in order to fulfill the objectives of this study. The social model states that corruption first affect and paralyze the social factors for example health, education and infrastructures, when the social services are deprived due to corruptions, those who are supposed to benefit will remain in the status quo, thus lack of these social services will produce poverty themselves. Therefore, the literature review will be organized in relation to these three models. 2.2.1 Economic…show more content…
Corrupt politicians and bureaucrats can create situation for their own benefit and establish regulations for firms to pay bribes for them. In a corrupt environment, some group can influence the quality of regulatory services by controlling the key state institutions that are to enforce regulations. In terms of policy implications, this indicates that targeted efforts to curb corruption can yield significant benefits to improve the regulation of the business (Breen and Gillander 2010). Mauro (2002) in his corruption analysis, used corruption indices and multiple regression to analyses 106 countries the result shows that high levels of corruption are linked with reduce levels of investment as a share of Gross Domestic Product (GDP) and with lower GDP growth per capita. (Lambsdorff) support with evidence that corruption have negative impact on capital accumulation by discouraging capital imports. World Bank study (2000a) suggests that high levels of corruption lower growth through reduced investment and
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