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The Impact Of Corruption On Economic Development In Mena Countries An Empirical Investigation By Using Panel Data Model

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  • Amrane Becherair

    (High National School of Statistics and Applied Economics, Algeria.)

Abstract

This paper will investigate the relationship between Corruption and Economic Development in Middle East and North Africa countries during 1996-2012; We will evaluate the impact of corruption on economic development of those countries using a panel data analysis of the direct impact and the indirect effect of corruption through specified transmission channels. We find that, Overall, corruption affects economic development directly with 0.0218 units. Moreover, corruption effect the economic performance in the region indirectly through political stability channel, an increase (decrease) of the control of corruption (corruption) by one unit causes an increase in the political stability of MENA region with 0.5132 units. That makes the effect of corruption on economic development through its impact on political stability equals to 0.0098 and the total effect of corruption on MENA's economic development 0.03316 units. Thus, reformers should reduce corruption through some other explanatory variables like political stability. The sheer size of the oil sector in MENA countries and political instability may be the main explanations for the significant negative impact of corruption on economic development.

Suggested Citation

  • Amrane Becherair, 2015. "The Impact Of Corruption On Economic Development In Mena Countries An Empirical Investigation By Using Panel Data Model," Post-Print hal-05364205, HAL.
    • Handle: RePEc:hal:journl:hal-05364205
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