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Risk Of Corruption For Economic Growth And Poverty: The Case Of A Developing Country


In this article, we attempt to assess the effects of corruption on economic growth, welfare and poverty in Senegal, using the dynamic computable general equilibrium model (CGE). The profile of fiscal governance is firstly built based on data relied to Global integrity, Open budget initiative and Public finance management reports for Senegal. Secondly, we build a CGE model based on the SAM of Senegalese economy. The simulation results show leakage of 10% of public investment as a result of corruption, which would effectively lead to an average loss of 2.6% points of economic growth per year. The welfare of households fall on average by 0.64% point per year. Moreover, the diversion of resources meant for public investment also has the effect of increasing the yearly incidence of poverty by 0.51% point on average, which is equivalent to 61,136 new poor every year.

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