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The case for human development: a cross-country analysis of corruption perceptions

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  • Peyton, Kyle
  • Belasen, Ariel

Abstract

Economic studies have demonstrated, both empirically and theoretically, that higher levels of human development (HD) and economic freedom (EF) are associated with lower levels of perceived corruption. This study separately examines the impact of human development and economic freedom on perceived levels of corruption across more than one hundred countries using a novel approach that greatly reduces multicollinear bias in the model. The results from this study confirm that both HD and EF are significant predictors of corruption perception levels. Furthermore, an increase in either HD or EF corresponds to a reduction in corruption perception. When evaluated separately, however, increases in human development are shown to correspond to greater reductions in corruption perception than economic freedom. This is demonstrated with an OLS regression using data collected from a single year and a number of panel estimates that utilize data from multiple years.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 31385.

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Date of creation: Jan 2010
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Handle: RePEc:pra:mprapa:31385

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Related research

Keywords: Human Development; Economic Freedom; Corruption; International; Cross-Country; Residual Analysis;

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  1. Mauro, Paolo, 1995. "Corruption and Growth," The Quarterly Journal of Economics, MIT Press, vol. 110(3), pages 681-712, August.
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  13. Knowles, Stephen & Owen, P. Dorian, 1995. "Health capital and cross-country variation in income per capita in the Mankiw-Romer-Weil model," Economics Letters, Elsevier, vol. 48(1), pages 99-106, April.
  14. Naci Mocan, 2008. "What Determines Corruption? International Evidence From Microdata," Economic Inquiry, Western Economic Association International, vol. 46(4), pages 493-510, October.
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  17. Al-Marhubi, Fahim A., 2000. "Corruption and inflation," Economics Letters, Elsevier, vol. 66(2), pages 199-202, February.
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