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Level of Corruption, Institutions and Economic Growth: Comparative Analysis from Developed and Developing Countries

Author

Listed:
  • Atdhetar Gara

    (Faculty of Business and Economics, South East European University, Tetovo, North Macedonia)

  • Xheneta Ujkani

    (Faculty of Economics, University of Pristina, Pristina, Kosovo)

Abstract

This study aims to analyze the factors influencing corruption levels across developed and developing countries, focusing on the roles of institutional quality, sustainable economic growth, income per capita, and human development in shaping corruption outcomes. The study also investigates the comparative differences in corruption levels between these two groups of countries. The analysis utilizes a quantitative approach based on secondary data from 27 European Union countries, covering the period from 2010 to 2022. Using a 13-year panel dataset of 351 observations, the study applies econometric models suited for panel data— specifically, fixed effects and random effects models. Findings reveal that institutional quality significantly reduces corruption levels (B=0.58), while human development shows a positive association with corruption (B=11.56). Conversely, income per capita exhibits a negative relationship with corruption (B=- 0.98). The fixed effects model shows a high explanatory power (R-squared=77.61%) and confirms no multicollinearity (VIF=1.59) and homoscedasticity (p=0.6636). Results also highlight that developed countries experience higher corruption levels compared to developing countries (B=3.97).

Suggested Citation

  • Atdhetar Gara & Xheneta Ujkani, 2026. "Level of Corruption, Institutions and Economic Growth: Comparative Analysis from Developed and Developing Countries," Economic Alternatives, University of National and World Economy, Sofia, Bulgaria, issue 2, pages 574-585, June.
    • Handle: RePEc:nwe:eajour:y:2026:i:2:p:574-585
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    Keywords

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    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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