Corruption, Economic Development, and Insecurity in Colombia

Corruption, Economic Development, and Insecurity in Colombia

Alexander Cotte Poveda (University of Göttingen, Germany & University of La Salle, Colombia & University Santo Tomas, Colombia)
DOI: 10.4018/978-1-4666-4474-8.ch009
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This research evaluates the connection between corruption, economic development, and insecurity in several Colombian departments. This chapter explores the dynamics of these variables using two empirical techniques: the Data Envelopment Analysis (DEA) and the Dynamic Panel Data Model (DPDM). DEA is performed to evaluate social performance in terms of corruption, economic development, and insecurity in Colombian departments with a higher level and risk of corruption and insecurity. Dynamic panel data analysis is performed to define the variables that affect corruption, insecurity, and economic development. The DEA model provides evidence that corruption and insecurity have different trends where economic development, natural resources, and political instability are key factors. The dynamic panel data model applied shows that Colombian departments with a higher level and risk of corruption and insecurity have lower economic growth, development, and social conditions, but higher levels of mineral resources and illegal drug activity, as well as the presence of irregular armed groups.
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Literature Review On Violence And Corruption

In the literature, the relationship between violence and corruption has been analysed from various perspectives, including Chandler and Graham (2010)’s research. Their study particularly focused on the role of violence and bribery using the Partial Least Squares (PLS) form of a structural equation model to analyse the role of corruption in preventing international market success. Chandler and Graham determined that exporters are less successful in penetrating foreign markets with higher levels of corruption and violence. Andvig and Fjeldstad (2008) studied crime, poverty and police corruption in developing countries and found that the relationship of these three features led to slow economic growth, decreased foreign investments and increased inequality. Powell et al., (2010) studied corruption crime and economic growth. They found that adequate rule of law, political stability and economic freedom could promote growth and decrease corruption.

Key Terms in this Chapter

Panel Data Analysis: A technique of studying a particular topic within multiple sites, periodically observed over a defined time period.

Violence: The intentional use of physical force or power, threatened or actual, against oneself, another person, or against a group or community that either results in or has a high likelihood of resulting in injury, death, psychological harm, or deprivation.

Economic Development: The study of how the economies are transformed from stagnation to growth and how these economies convert from low income to high-income levels. Economic development understands as the improvement process of quality of life, the creation of propitious conditions for the growth of standards of welfare of population through the establishment of institutions and social, politics and economic systems that promote human dignity, respect for social conditions and cause the freedom of population through application of election variables, this is an expansion process of capacities that enjoy the people.

Generalized Method of Moments (GMM): An estimation technique of static parameters that allow the interpretation and analysis of majority of estimation methods in dynamic panel data.

Corruption: Defined as the misuse or the abuse of positions, power or confidence for private gain in detriment of collective interest. It can come in various forms and a wide array of illicit behavior, such as bribery, extortion, fraud, nepotism, graft, speed money, pilferage, theft, embezzlement, falsification of records, kickbacks, influence peddling, and campaign contributions.

Crime: The illegal action according to the juridical system.

Data Envelopment Analysis: A nonparametric method involves the use of linear programming methods to build a nonparametric piecewise frontier over data, so as to be able to calculate efficiencies relative to this frontier using several economic units with homogeneous conditions as for inputs and outputs.

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