International Conference on Eurasian Economies
2-4 September 2020 – Baku - AZERBAIJAN
Paper properties
Paper ID : 2418
Status : Paper published
Language : Turkish
Topic : Macroeconomics
Presenter: Prof. Dr. Dilek Yılmazcan
Presentation Location : Beykent
Session : 4A Makroekonomi
Corruption and its Effects on Macroeconomy
Yolsuzluk ve Makroekonomi Üzerindeki Etkileri
- Prof. Dr. Dilek Yılmazcan (Maltepe University, Türkiye)
- Ph.D. candidate Hasan Basri Çiftçi (Maltepe University, Türkiye)
Abstract
This paper examines the issue of corruption and its effects on macroeconomy, especially on public expenditures, financing balance, investments, and savings. The issue is going to be discussed based on empirical evidence (such as CPI Reports and Indexes) regarding where and how the macroeconomic ingredients are sensitive to the corruption. The aim is to contribute unreconciled discussions from the perspective of economy of corruption. The corruption level is low in the developed countries where public spending or tax revenues are higher than national income; however, because of silent or weak structures of institutional control and fiscal transparency, the level of corruption is high in Turkey and Eurasian economies. Such difference has important macroeconomic impacts in those countries with higher levels of corruption. Public goods and services are inputs of private productive activities. States finance such inputs through taxes that are collected from taxpayers. If this financing process is influenced by corruption, efficiency of the public expenditures’ decreases. And, that causes a sharp decrease in the total amount of invested capital since the growing level of corruption jeopardizes the risk of making an investment. And, increase in the level of corruption negatively affects the general level of prices and lowers income per capita. Thus, it seems that higher level of corruption is in a negative relationship with the level of public investments, public revenues, savings, quality of public goods and services, efficiency of public investments and public financing balance.
JEL codes: D73, E60
Yılmazcan, Dilek, Çiftçi, Hasan Basri (2020). "Corruption and its Effects on Macroeconomy" in Proceedings of International Conference of Eurasian Economies 2020, pp.98-105, Baku - AZERBAIJAN.
DOI: https://doi.org/10.36880/C12.02418
