Good Governance

     Professor Hawkins, this report is on my finding for the correlation between a countries level of economic development and corruption in the government. The two indicators that I selected to draw my report from are GDP PPP in current international currency (Worldbank), and corruption as rated by Transparency International (Transparency).

     My reasoning for choosing these two indicators is because I believe they will give the best information in relation to what I am researching. GDP PPP is a measure of the goods and services produced by a country in currency. I chose this for my economic development indicator, because the higher GDP that a country has, the more developed its’ economy should be. For corruption, I went to Transparency International and used their data for the amount of corruption that they have measured for a countries government. My data for both points comes from the 2011 year, having the most recent data that covers an entire year. The scale for the economy is in units per country, and for corruption, each country was ranked on a 10 point scale, with 10 being the least corrupt, and 1 being the most corrupt.

     The graph, while not perfect, shows what can be called a clear trend between the amount of corruption in a country and its’ economic development as based on GDP PPP. Starting in the bottom left of the graph are countries with the lowest amount of GDP PPP and the highest corruption scores. We can see that there are very few deviations from the cluster. The few countries that are corrupt but have higher GDP PPP’s are the countries that have very valuable resources that the rest of the world wants. Most of these countries are the oil producers in the Middle East. As the corruption scale heads towards 10, or less corrupt, on average the countries have higher GDP PPP’s, meaning a higher level of economic development. As the graph progresses, it gives a linear correlation between the two indicators, albeit one that is not tight along a particular line, but still showing a linear progression.

     I believe that we are able to see from the graph that as a government deals less in corruption, on average, the economy of that country will be at a higher level as compared to similar countries of size and population. It is my theories that as governments deal less with corruption, the less likely that government is going to tolerate corruption in its lower levels. With less corruption in a country, the more likely that country is to have its people going out and gaining jobs in respected workforces, leading to more money in the economy and amongst the people. This growth will continue to spread and help people at all levels increase in wealth and further the advancement of the country’s economy. In contrast, a government that deals heavily in corruption will produce a country less likely to succeed. Due to corruption, officials and citizens alike will be more likely to fight amongst themselves, leading to less people working towards long term goals of progress.

Works Cited

World dataBank. "World Development Indicators (WDI) & Global Development Finance (GDF)." databank.worldbank.org.

Transparency International. "Corruption Perceptions Index 2011." http://cpi.transparency.org/cpi2011/results/.

Relationship Between Colonialism, Good Governance, and Economic Development

            Mary-Catherine Zachary

PL SC 150

Hawkins

I have chosen a couple key indicators that I think will best identify the relationship between colonialism, “good governance,” and economic development. Colonialism is the control or governing influence over a dependent country or territory.  “Good governance” is how public institutions conduct public affairs and manage public resources in order to guarantee the realization of human rights. Economic development is a sustained increase in the standard of living of a country’s population resulting from changes and improvements in education, infrastructure, and technology. I believe that each of these factors have a relatively significant effect each other. The two indicators that I have chosen are; exports of goods and services and imports of goods and services.

            Imports and exports are a good indicator of economic development and growth. Without imports and exports, these countries would not be growing and strengthening their economies because they wouldn’t be making any money. I chose the countries of Libya, Mexico, Brazil, France, United States of America, United Kingdom, Australia, and Haiti. These countries are all different, but the number of imports and exports all seem to be in correlation with strength of their economy in each. Almost every single country we got indicators for had a positive growth in their imports and exports, with the exception of Haiti and Australia.

            On January 12, 2010, Haiti was shocked with a huge earthquake that wiped out thousands of people’s homes, schools, businesses, and more. The earthquake was a 7.0 magnitude and struck less than 10 miles from Haiti’s major port city, Port-au-Prince. This earthquake is what slowed down the economy of Haiti. Imports and exports, especially exports, were slowed down because the country had very few resources to provide goods and services at that point in their history. It makes sense that their imports and exports would go down a significant amount.

            Colonialism, good governance, and economic development all go hand in hand when developing an economy. If used properly, each can speed up the economic growth of a developing country. At some point, however, colonialism can become a bad thing if the country is being used solely for the welfare of another country. A country must be able to work on its own in order to have a stable economy.

Your Eyes Can Decieve You - Don't Trust Them

Andrew Muhlestein
19 November 2012
Political Science 150
Professor Hawkins

Blog 9: Good Governance

There has been a lot of talk about the key variables in determining whether a country will have good governance. You've asked me to look at the data of corruption and wealth and see if these are at last correlated in their relationship. In order to do so, I've chosen to use Gross National Income per capita at Purchasing Power Parity from the World Bank's data as a representation of wealth. This is a good measure because it breaks down wealth to an individual level, which leaves out much of the skewing effect of unbalanced distribution of wealth, and it levels out inflation via the purchasing power parity (so what your money will buy you, as opposed to how much you make in an arbitrary number). For corruption I've decided to use the Corruption Perceptions Index produced by Transparency International. This index is a good measure because it takes survey data from a large population sample gathering data on the number of bribes, the necessity of bribes in order to get things done, and the general feel of the people about corruption. This is the best measure as there is no reliable way to directly measure corruption, and these people actually live in the area and experience it. All data was from 2010.

After gathering the data I made a scatterplot out of it using Microsoft Excel, and these were the results.

The results showed a little correlation between GNI and Corruption. Yet this relationship is weak enough that it's difficult to say the nature of it; that is to say, whether it is linear, curved, hyperbolic, etc. It is clear, however, that if your GNI is very low, you definitely have a better chacne of having high corruption, as seen in that large clump in the bottom left corner. Having looked at my fellow... research assistants' work, however, it's clear that in other years the correlation is much stronger.

As a result of both my own findings and the findings of my fellow students, there are some conclusions we can reach about outliers. First, most countries stayed roughly the same on the list. However, a small number shift enough to form a pretty linear relationship, though their stay in that position is very temporary. It's easy to suggest a relationship when a line is formed, but we must recognize that the vast majority of the points are not part of that line, but rather form clumps. There is the low GNI high corruption clump, a looser high GNI high corruption clump, and another loose high GNI low corruption clump.

**From this information we can start to draw some tentative conclusions. First this clumping, as opposed to a linear line, suggests a different type of relationship. Instead of a linear relationship, where for example the higher your GNI the lower your corruption, we should instead look at a categorical correlation. That is to say, if your country fits in these categories, then you will probably be in this clump. This lends a lot of credence to the colonialization theories, where ex-colonies form one of the clumps.  This would be because of the host of similarities between those countries, such as type of installed government, shared (roughly) history, similiar language, stronger trade relationships between them, similar justice systems, similiar tariffs/trade laws, etc. There's a lot of room within that for different clumps, such as whose colony you were, etc., but the approach is nonetheless solid.

Sources

"Databank User Session Time Out." World Databank. N.p., n.d. Web. 19 Nov. 2012. <http://databank.worldbank.org/ddp/home.do?Step=3&id=4>.

"2010 Corruption Perceptions Index -- Results." Transparency International - the global coalition against corruption. N.p., n.d. Web. 19 Nov. 2012. <http://www.transparency.org/cpi2010/results>.

Corruption Perceptions

Blog 9: Good Governance

            In order to test the relationship between good governance and economic development, I tracked data for 167 nations for which data was available. Based on my statistical research, I found that there is a positive linear correlation between good governance and economic development. In order to measure levels of good governance, I chose to use the Corruption Perceptions Index created by Transparency International. This index gives a score, ranging from 1 to 10, to each country, where a score of 1 indicates high levels of corruption and 10 indicates low levels (Transparency International 2011). To measure levels of economic development, I gathered data for PPP-equalized GDP per capita from the World Development Indicators database (World Bank 2011). All of this data is from the year 2011, the most recent year possible.

            The Corruption Perceptions Index is an effective measurement of good governance, because it agglomerates scores dealing with all aspects of corruption, from humanitarian aid to education (Transparency International 2011). The presence of corruption is a very strong indication of a lack of good governance, and the scale of this index makes it useful in statistically measuring the lack of good governance’s effect on economic development. Similarly, the measure of per capita GDP is a good indication of economic development levels, because it gives a concrete idea about the total economic power of a nation as well as the economic well-being of the populace.

            The graph produced by this data shows a clear linear relationship linking good governance with strong economic development. This relationship begins in a tight cluster around the nations with high corruption levels and lower economic development levels, and spreads out as it approaches those nations with lower corruption levels and higher economic development. Despite this change in tightness in the graph, it is still tight enough throughout to clearly demonstrate a relationship between the two variables. There are some evident outliers—countries which have high corruption as well as high economic development, as well as countries which have low corruption and low economics. Even these outliers, however, are consistent with the theory that good governance affects economic development. The first group of outliers is made up for the most part of oil nations, Kuwait being a prime example. The second group is made up of mostly island nations that are former British colonies.      

            It makes sense that this correlation should exist. In terms of causation, we may say that corruption discourages honest business practice and capitalism, which would promote economic growth. Instead, in corrupt nations, monetary gain is achieved through graft, embezzlement, and theft. This promotes a culture in corrupt nations that discourages correct business practice, which decreases total economic development and increases inequality. This theory remains true even considering the two types of outliers described above. Oil nations, due to their abundant natural resources, have naturally higher GDP to begin with. Thus, the effect of graft on their economy is minimized, even though it still occurs. For island nations, colonial legacy and lack of resources has left them with lower economies, even though their governments are relatively non-corrupt.

            The bottom line: there is a clear relationship between good governance and economic development. Just take a look at the graph.

Graph would not post.

 REFERENCES

Transparency International. 2011. Corruption Perceptions Index. http://cpi.transparency.org/cpi2011/results/ (accessed November 17, 2012).

World Bank. 2011. GDP per capita (current US$). http://data.worldbank.org/indicator/NY.GDP.PCAP.CD (accessed November 17, 2012).

Lefens Blog 9

Sophie Lefens

Blog 9

Description of indicators: For the level of economic development I chose to use the PPP GDP data from World Bank. According to World Bank, “purchasing power parity conversion factor is the number of units a country’s currency required to buy the same amounts of good and services in the domestic market as U.S. dollar would buy in the United States. And the conversion factor is for GDP (gross domestic product). The GDP is the market value of the entire country’s produced products. This means, that usually, the higher the GDP PPP the less economically developed the country is because it shows that their money is worth less. For the corruption indicator I used the Corruption Perception Index from Transparency International. The results in this index measure the perceive level of public sector corruption. This kind of corruption includes bribery, embezzlement and kickbacks in public procurement. This index is from 1 to 9. The least corrupt countries are in the 7’s 8’s and 9’s.

 The bottom line: The graph shows that there is a correlation between GDP PPP and the Corruption Perception Index. The countries with less corruption also have a lower GDP PPP. The inverse of that would be that the most corrupt countries also have the highest GDP PPP. So the graph indicates that clearly there is a correlation between economic success and national corruption. When a state’s government is functioning well and behaving honestly, then that state’s economy tends to do better, according to the graph.

Tentative explanation: A reasonable explanation for this pattern would be that when state governments are dealing in bribes, black mail and embezzlement they interfere with the flow of the national market and inhibit economic growth. According to a study conducted by B.Y.U business students, the amount of government corruption affects that country’s role in international trade. Foreign Direct Investment (FDI) is considerably lower in the more corrupt states. Other countries are hesitant to cooperate and engage in business with governments that could be cheating them and their people at any moment. The article also says that often in corrupt states, “scarce resources are put into unproductive channels which acts as a brake on economic development” (Philip 1). The article also discusses that developing countries are especially vulnerable to government corruption. Corrupt governments often misuse national funds, which creates an even wider gap between the rich and the poor.

Works Cited

Bryon, Philip J. "Corruption and Development: The Armenian Case." (2009): n. pag. Marriott School. Web.

Good Governance

Suhwan (Alma) Seo

Poli Sci 150

Professor Hawkins

November 19, 2012

Blog 9: Good Governance

             The debate between corruption and economic development is unsettled. Some have argued that corruption damages economic development because it undermines the economy; however, others have argued that corruption may be desirable because if provides a quick way to bypass unnecessary regulations and policies. So taking samples of 163 countries, the data showed a certain correlation between economic development and corruption level. By taking the GDP PPP per capita (gross domestic product at purchasing power parity per capita) and the corruption index score of each country, the data did show a positive relationship between the two sets of data.

           Samuels gave few hypothesis concerning good governance and economic development. One said that the leaders had to respond to special-interest pressures for raising taxes and spending on unproductive activities. Another said that leaders often are not public-minded so they are susceptible to corruption (Samuels 296). From the collected data, there seems to be a positive correlation between

             The corruption index score came from Transparency International which monitors corporate and political level of corruptions and puts out a score for each country. The corruption index score goes from zero (high corruption) to ten (very clean) ("Transparency International). The economic development of each country was designated by each country's GDP PPP per capita. The data came from the information provided by the World Bank ("World Development Indicator").

          (Data graph would not post)

             After taking the data, the linear correlation which measures the strength and the direction of a linear relationship between two variables was calculated. The result was that r, the linear correlation coefficient, equaled to be 0.775. As r gets closer to 1, it shows a strong positive correlation between the two data ("Statistic 2"). From this result, it would be safe to assume that corruption and economic development have some relationship.

             In addition, the R² is the coefficient of determination. R² shows the strength of the linear association between two variables. It also measures how well the regression line represents the data, and the further the line is away from the points, the less the regression line is able to explain about the point ("Statistic 2"). Since the R² equaled 0.6006, the regression line is accountable to only 60% of the data points. Though it may not be the high percent, it still is high enough to assume that the linear regression line is reliable for these data points.

             Even with amongst these data points, there are outliers that can skew the data and it's linear correlation shape. Because of the outliers, there is a distortion in the tightness of the graph. According to this correlation, countries with no corruption should have better economies; however, this isn't always so. For example, St. Lucia has a GDP PPP per capita of around $9385 and has a corruption index score of 7. Most countries with a similar GDP PPP per capita as St. Lucia have corruption index scores around 2 and 3. Furthermore, countries like Venezuela and Equatorial Guinea have fairly high GDP PPP per capita but have one of the lowest scores on the corruption index. So though most countries tend to follow a common trend, there are few countries that don't always follow it.

             In conclusion, from the data collected, there seems to be a positive correlation between corruption and economic development. The correlation may not be the strongest; however, there still a moderate correlation to assume there is a certain relationship. Though there are few outliers, most of the countries seem to follow the trend that higher corruption equals less economic development in the country.

Works Cited

Samuels, David J. 2012. Comparative Politics. New Jersey: Pearson Education

"Statistics 2 - Correlation Coefficient and Coefficient of Determination." Statistics 2 - Correlation Coefficient and Coefficient of Determination. Finding Your Way Around, n.d. Web. 18 Nov. 2012. <http://mathbits.com/MathBits/TIsection/Statistics2/correlation.htm>.

"Transparency International - the Global Coalition against Corruption." Transparency International - the Global Coalition against Corruption. Transparency International, 2012. Web. 18 Nov. 2012. <http://www.transparency.org/>.

"World Development Indicators." The World Bank. The World Bank, 2012. Web. 18 Nov. 2012. <http://data.worldbank.org/data-catalog/world-development-indicators>.