Corruption, Economic Development, and Insecurity in Colombia

Corruption, Economic Development, and Insecurity in Colombia

Alexander Cotte Poveda
Copyright: © 2015 |Pages: 13
DOI: 10.4018/978-1-4666-8195-8.ch030
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Abstract

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.

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