Some years ago I supervised a master 's thesis about Albanian economic system. My student - Klodian Muco (now Ph.D. at Università dell'Insubria and Assistant Professor at the University of Gjirocastra ) - analyzed the correlation between different economic and social variables and the foreign direct investment (we built a Panel 1990-2006 for three different Albanian Urban Areas). We found an interesting positive correlation between FDI and a corruption index. Obviously the research should be deepen, and I hope to have the time in future for doing it, but we may also think that in some cases crime may have positive effect on GDP.
The administrative and economic corruption in any country that destroys individual economy for most of the population and macroeconomic and I'll give you an example:
The economy of the Democratic Republic of Congo suffered a recession sharply in the mid-eighties and in the middle of the first of the second millennium decade, and suffered 70% of the families in the Congo from food insecurity, and the number of the poor 44 million people, of whom 12 million live in cities [1] As a result of civil wars. that gripped the country, in addition to a significant decline in national output and government revenue and rising external debt and the death of nearly 5 million people and the spread of disease, hunger and malnutrition, which hit two-thirds of the population after it was Congo's economy a dynamic economies. The economic crisis between 2008-2009 and severely affected the economy, which had a growth rate in 2008 to 8.2%, while 2.7% in 2009 [2]. Congo is witnessing a rise of illegal economic activities and to remember that in the GDP statistics. Upon independence in 1960, was the second largest major industrialized nations in Africa after South Africa, the Democratic Republic of Congo.
And Transparency International ranked the DRC based on the corruption index in rank 156 out of 163 countries [3]. President Joseph Kabila and the formation of a committee aimed at combating economic crimes after his rise to power in 2001 [4][(http://ar.m.wikipedia.org)
Corruption is an evil deeply rooted in the mores of the human hungry to make money at the expense of his country and fellow citizens. I'm no expert in the field of sociology and economics but I can tell you about the state of affairs of my country. Given the "magnitude of the socio economic development of my country, therefore many markets, but also rampant corruption at the expense of our economy.
I think you must have experience this.This also makes our country Incredible.Starting from a stakeholders ,politician,businessman ........everyone.. is corrupt... .As far as the technical knowledge is concerned i think you will be having sufficient knowledge and exposure how to establish the relationship among those variables.
The money made by corruption cannot be treated as earned money from legitimate sources and hence treated as black money. No tax is paid on this and it cannot be invested as this money has no visible source of origin. So it does not add any value to GDP and is used in non-economical transaction like buying of gold or precious items that are easily movable and can be kept in personal possession. In developing countries where there is weak law enforcement, the money is transferred to other tax heaven countries. This can be regarded as a sort of Capital Flight. It reduces the volume of circulating money in the economy. Lowers investment. has negative impact on the welfare. increases poverty. increases unemployment. and all these and other like these factors tend to decrease the volume of GDP.
From a national accounting perspective,the emergence of a kleptocracy will eventually distort the G component directly in the idealized:Y=C+I+G+XM, the expenditure based accounting of GDP.Though corruption will ultimately creep in, cripple & distort, the other sectors indirectly: