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Does Corruption Hinder The Contribution Of Government External Debt To Economic Growth?
The aim of this paper is to empirically investigate the impact of government external debt on economic growth while controlling corruption effect in Central Asia. The study also intends to determine whether or not the relationship between external government debt and economic growth represent any non-linear relationship. Methodology: To evaluate the effect of public debt on growth, the underlying research aims to comparatively consider the application of the bootstrap-based bias correction Fixed-effect and Generalized method of moments (GMM, Arellano-Bond, 1991) models based on the growth regression technique developed by Kumar and Woo (2010). The study employs data between 2000 and 2020. Findings: The impact of government external debt on growth is estimated to be negative in those countries where the level of corruption is high, but the effect is positive when it is true in the opposite order. In other words, the effect of public debt on growth is a function of corruption.