Investigating linkages between human capital, social development and corruption : evidence from a 'SADC' cross-country empirical study using panel data

Abstract

Corruption remains one of the most enduring phenomenon across the world and notably in Sub Saharan Africa where its scope and depth still culminate generally at distressing levels to a greater or lesser extent across countries and regions. This study presents an empirical analysis of the causes and association types of corruption across SADC countries. Through quantitative methods of analysis, it delivers an assessment of the conditional effect of the human capital and social development along with their respective and combined impact on a corruption model using panel data and multivariate regression estimates across the fifteen SADC countries for the period 2005 - 2013. The research then identifies other covariates economic or institutional - and their functional dependence to the hypothesised triad nexus - that may predict the diversity of corruption level outcomes in the region.The hypotheses considered and tested suggest that both human capital (HC) and social development (SD) are key determinants of corruption outcome levels. We report consistently strong R squared (R2) and high magnitude coefficients for the two variables under several estimation models and for various other control economic and governance variables. For robustness testing, alternate measures of corruption are also used. The results mostly but not entirely support the initial findings. The inclusion of the institutional variables does not confirm for SADC countries the largely found negative association of corruption with democracy and press freedom. Hence young and developing democracies across the region may not benefit from lower levels of corruption in the short run as institutional frameworks in formation remain weak. Meanwhile this research did not allow to derive clear arguments in relation to true causality and effects’ directions. The results remain agnostic with regards to causation between corruption and the selected explanatory variables. In the end human capital and social development in particular were found to be strong and consistent predictors of corruption control and the associations remain robust and significant under numerous specifications. While omnipresent rhetoric has largely focused on the political dimensions of corruption this study provides a substantial evidence and a nuance contribution to knowledge and literature to the concept of corruption by introducing the interaction effects of human capital and social development which indicate that both explanatory variables are consistent predictors of corruption control levels. In the footsteps of Sen’s theory, it offers a new frame which grants an understanding of the phenomenon of corruption from a capability and human development approach as a new avenue for research. All of which has crucial policy implications for concerned governments. Indeed, efforts to stamp out corruption should be designed first to eliminate or mitigate the root - conditions of its incidence focusing on policies geared towards better education and higher living standards. Relying chiefly on oversight agencies and lending disproportionate attention to enforcement actions and regulatory frameworks would indeed prove to be a misplaced priority. Fundamentally this thesis argues a new scheme of intelligibility, a renewed “episteme” of corruption which refers to the order of human developmental structures underlying the production of corrupt practices.