Shedding Light on the Effects of Corruption on Economic Growth: Empirical Evidence Across EU Countries Based on Panel Data Analysis and Simulation Forecast Scenarios

Access to health care, education, and social protection programs is hampered by corruption. Corruption increases vulnerability and socio-economic inequities at the individual, family, community, and national levels. The poorest and most vulnerable individuals are disproportionately affected by corruption. Corruption is a phenomenon that has been in society from its inception and has grown with it, taking on a variety of forms. As a result, including mechanisms for preventing, detecting, and prosecuting corruption and bribery becomes even more critical in the sanitary crisis. In order to do that, it is necessary to analyze and classify EU member states in terms of governance quality and quantify the way in which a more efficient control of corruption in conjunction with higher institutional credibility would boost the economic growth across EU countries. The main methods applied for this technical demarche have been the principal component analysis, cluster analysis, and panel data approach. The empirical results pointed out the relevance of two leading indicators in governance performance: the Corruption Perceptions Index and the Political Stability Index. At the same time, our findings revealed that better control of corruption in conjunction with a higher quality of institutions would lead to a boost in economic growth among EU countries.