Monday, October 3, 2016

Impact of a Corrupt Government



The statistical analysis of data emanating from the documentary analysis from existing reports (both printed and electronic formats) used the Spearman Rank Correlation to determine the significant relationship between graft and corruption and rule of law, economic growth, human development and gross national happiness of citizens.
Based on the findings, the gross domestic product per capita posted a significant relationship with the corruption perception index (CPI).  This means that a more corrupt regime or government will have less productive or poorer citizenry.    This confirms the results from the expert interviews** conducted that a corrupt government deters growth of the economy because investments will not escalate; entrepreneurs will not be encouraged to put up a business because before cash registers will have to be utilized, you have already spent it for grease money; foreign investors will be discouraged to invest.    A corrupt government destroys Filipinos morale fiber, desensitizes people, promotes poverty, creates a greater number of poor people, no inclusive growth, and delays in infrastructure project implementation.
The corruption perception index was matched against Human Development Index (HDI) of the Philippines, and analyzed across 36 randomly selected countries.  The HDI is a relative new barometer of economic development of a country.     As a result, there is a high correlation as well.  Life expectancy, population literacy, incidence of poverty, and other human development indicators are apparently better in countries perceived to be less corrupt.  Meanwhile, the same human development indicators posted worse figures in countries perceived to be more corrupt.  Thus, there is a strong link between good governance and incidence of corruption in a country.   This further confirms the results from the expert interviews that a corrupt government results to poverty and poor quality of life, a wide gap between the rich and the poor, and inadequate social services.
Further, the gross national happiness (GNH) index is perfectly correlated with the corruption perception index across Philippine presidencies.  This means that if a government is clean and not corrupt, its citizens would be very happy and satisfied with the delivery of services.  Since this measure was recently introduced by the United Nations, only the presidencies of Benigno Simeon Aquino II and Gloria Macapagal Arroyo were compared.    Across 36 randomly selected countries, the gross national happiness index and corruption perception index (CPI) were correlated.  Once again, there is a strong link between the two variables.
Finally, across 36 randomly selected countries, there is a high correlation between the rule of law index and corruption perception index.  This means that if a government is clean and not corrupt, there will be effective enforcement of system of laws.
There is a need to determine the relationship of the incidence of graft and corruption and rule of law, economic growth, human development index and gross national happiness because it analyzes how graft and corruption undermine every effort to enforce the rule of law and establish good governance in the land.
Based on the findings, there is a direct link of corruption and the rule of law, economic growth, human development and gross national happiness   The GDP per capita of the Philippines is described as low.  This can be attributed due to the country’s weak institutions, weak revenue performance, weighty debt service, and high input costs which put a strain on government spending.  Corruption and political instability are also unique in the Philippines in terms of its unpredictability and extent, which serves as a disincentive for the private sector to invest.   Moreover, poverty remains a critical social problem in Philippines.  
On the other hand, human development index (HDI) measures the quality of life of individuals in a certain country.    The Philippines ranks 114 on HDI and is classified as “Medium Human Development” according to the 2013 Human Development Report released by the United Nations Development Programme.    There is a slow increase in the overall value of the HDI in the Philippines.    Quality of life in the Philippines remains unchanged as more Filipinos remain to be vulnerable to poverty despite a booming economy.  Having a low CPI at 38 explains why the Philippines has a higher perception of corruption because of its experience of lower quality of life. 
Gross national happiness (GNH) measures the level of satisfaction of the citizens of a country.    If a government is clean and not corrupt, its citizens would be very happy and satisfied with the delivery of public services.  A significant finding indicates that the gross national happiness (GNH) index is perfectly correlated with the corruption perception index across Philippine presidencies. 
Finally, the rule of law index measures how the rule of law is experienced by the public across the globe.    If a government is clean and not corrupt, there will be an effective system of the rule of law.  The Philippines ranks 51 on Rule of Law Index according to the World Justice Project Rule of Law Index 2015.   This explains why the rule of law in the Philippines is not effective. 

  References:

Nelson, R. (2007), “The Philippine Economic Mystery,” The Philippine Review of Economics, Vol. XLIV No.1 (Manila, Philippines).

Amojelar, D. (2013).  Quality of Life in Philippines stagnates despite economic boom- UNDP Report,”  Interaksyon.com.



** Expert interview -- A qualitative interview involving 30 experts on good governance was undertaken to determine:  a)  the root causes of graft and corruption in the Philippines;  b) impact of having a corrupt government;  and c) suggested laws, interventions or measures to curb the incidence of corruption in the country.   The qualifications and credentials of these experts were carefully determined to enhance the credibility of the collated opinions.  These 30 experts emanated from the academe, government, judiciary and private sectors.

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