The Relationship Between Corruption and Public Investment at the Municipalities' Level in Indonesia

Teguh Dartanto
Working Paper LPEM FEB UI • March 2010 Indonesia

Abstract

This research is conducted to quantitatively measure the relationship between corruption and public investment at municipalities' level in Indonesia. According to Nash Equilibrium derived from mixed strategies, the relationship between corruption and public investment can be both positive and negative depending on the level of the corruption Index. Moreover, the econometric estimations from cross section data and pooled data consistently confirm that the relationship between corruption and public investment is in non linear quadratic form. It was found that the public investment reaches the lowest level when the corruption index ranges from 4.42-4.64.

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Publisher

LPEM FEB UI

Institute for Economic and Social Research – Faculty of Economics and Business, University of Ind... see more