Corruption and Development

In Indonesia, a problem of corruption is very gravely. I am sorry that fighting against corruption is not the number one priority in either Mid Term National Development Planning (Rencana Pembangunan Nasional Jangka Menengah) 2004-2009 or Government Work Plan (Rencana Kerja Pemerintah) 2007 and 2008.

When I was studying economics I wrote a thesis showing that fighting corruption is very benefecial for developing countries such as Indonesia because there is a big portion of government expenditure in funding development.

Here is an abstract of my thesis:

Corruption and Development:
A Cross-Country Analysis

This paper tries to investigate and explain the impact of corruption on per capita GDP across 105 countries. The distinction of this paper comparing to earlier studies is to investigate that the impact of corruption on development is different among countries by involving dummy developed and developing countries and cluster geographical areas (Western and developed countries, Developing countries in Asia, Africa, South America and Caribbean, and Eastern Europe and Ex Soviet Union). The methods used are OLS, 2SLS, and fixed effects regressions. The results show that first, by using OLS and 2SLS, the impact of corruption on per capita GDP is negatively significant. Fixed effects estimation show no impact of corruption on per capita GDP but this is probably due to the short panel as well as measurement error. Second, developing countries have higher impact of corruption on per capita GDP rather than developed countries. Third, looking on across geographical areas, developing countries in Eastern Europe and Ex Soviet Union have the highest negative impact, and then in Asia, Africa, Western and developed countries, and the lowest is in developing countries in South America and Caribbean.

Update:
The short version of my thesis is published by Development Planning Magazine. There is no official website of this magazine.