آزادسازی مالی، فساد بوروکراتیک و توسعه اقتصادی

We study the effect of international financial integration on economic development when the quality of governance may be compromised by corruption. Our analysis is based on a dynamic general equilibrium model of a small economy in which growth is driven by capital accumulation and public policy is administered by government-appointed bureaucrats. Corruption may arise due to the opportunity for bureaucrats to embezzle public funds, an opportunity that is made more attractive by financial liberalization which, at the same time, raises efficiency in capital production. Our main results may be summarized as follows: (1) corruption is always bad for economic development, but its effect is worse if the economy is open than if it is closed; (2) the incidence of corruption may, itself, be affected by both the development and openness of the economy; (3) financial liberalization is good for development when governance is good, but may be bad for development when governance is bad; and (4) corruption and poverty may coexist as permanent, rather than just transitory, fixtures of an economy.

There is considerable debate about the merits of international financial integration. For many years, economists (both academics and practitioners) have continued to dispute the desirability of opening up financial markets and allowing free flows of capital between countries. The debate has been particularly pertinent to the case of less developed economies, for which there has been an urgent need to find appropriate strategies to promote growth and reduce poverty. In spite of all that has been written, there remains considerable disagreement about whether financial liberalization is one of these strategies. This lack of consensus is found at both theoretical and empirical levels, and there is little sign of it disappearing in the near future. While the debate on financial integration has continued, another major issue has appeared on the international development agenda. This is the role of governance in determining the functioning of institutions, the effectiveness of policies and the prospects for growth and prosperity. The concept of governance has several dimensions to it, but one aspect, in particular, has commanded widespread attention - namely, corruption. Broadly speaking, corruption is defined as the abuse of power by public officials to make personal gains. There are numerous different forms that this can take and numerous different ways that it can impact on people’s lives. In many countries the scale of corrupt activity is often quite staggering, as is the ingenuity of those who engage in it. Nowadays, more than ever before, corruption is regarded as one of the most serious threats to economic development and the alleviation of poverty around the world. The debate on financial liberalization makes a few passing references to corruption, but there are good reasons for thinking that the issue deserves more than this. The present paper seeks to elucidate these reasons. Using a simple analytical framework, we study the potential linkages between financial integration, public sector corruption and economic development. The important feature of these linkages is that they are multi-causal with effects running from integration to development, integration to corruption, corruption to integration, corruption to development and development to corruption. To our knowledge, the analysis is the first to allow for such a multitude of interactions, the implications of which are a number of results which yield insights into the possible consequences of opening up financial markets. As background and motivation for the analysis, we devote the remainder of our introductory discussion to a brief review of the different literatures on which we draw.

Advocates of international financial integration would claim that dismantling barriers to cross-country capital flows can only be good for economic development: with fewer constraints on transactions and greater competition amongst agents, there are sure to be efficiency gains conducive to higher growth. Those of a more sceptical disposition would argue quite differently: in a second-best world of assorted imperfections, the removal of distortions from financial markets alone may actually do more harm than good. Similar caution may be expressed about the view that any increase in the degree of economic (and political) freedom is certain to improve the quality of governance by reducing the extent of corruption. A more refined argument would contend that this need not be the case as greater freedom brings with it new incentives and new opportunities for individuals to engage in corrupt practices. The above considerations have provided the motivation for this paper. Our objective has been to analyze precisely how the liberalization of financial markets might affect the long-run development of an economy in which the level of corruption may, itself, change endogenously with changes in the circumstances of individuals. Our principal findings may be summarized as follows: first, corruption is always detrimental to economic development, but its effect is worse when financial markets are liberalized than when they are not; second, the extent of corruption is more likely to be higher in financially-open economies than financially-closed economies, and in poor countries than rich countries; third, financial liberalization is good for development if governance is good, but may be bad (perhaps very bad) for development if governance is bad; and fourth, corruption and poverty may coexist as persistent features of an economy unless fundamental reforms take place. These results accord well with empirical observations and indicate the importance of taking into account the political economy aspects of financial liberalization when evaluating the consequences that liberalization might have.