Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/207207 
Year of Publication: 
2019
Series/Report no.: 
CESifo Working Paper No. 7816
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
The nexus between corruption and economic growth has been examined for a long time. Many empirical studies measured corruption by the reversed Transparency International’s Perception of Corruption Index (CPI) and ignored that the CPI was not comparable over time. The CPI is comparable over time since the year 2012. We employ new data for 175 countries over the period 2012-2018 and re-examine the nexus between corruption and economic growth. The cumulative long-run effect of corruption on growth is that real per capita GDP decreased by around 17% when the reversed CPI increased by one standard deviation. The effect of corruption on economic growth is especially pronounced in autocracies and transmits to growth by decreasing FDI and increasing inflation.
Subjects: 
perceived corruption
economic growth
panel data
JEL: 
C23
H11
K40
O11
Document Type: 
Working Paper
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