International Journal of Public Finance (Dec 2018)
An Analysis on the Relationship between the Corruption Perception Index and Various Development Indexes of the Countries
Abstract
While corruption is defined by the World Bank as abusing its public power for private interests, it is defined in the United Nations Convention as any misuse of the entrusted authority in such a way as to damage public and private interests. Corruption has been emerged because of lots of social, managerial, economic and political reasons and has become a problem facing every country today. In the studies conducted on the corruption perception index, while the index is found to be related to many variables affecting social and economic structure, there are many different opinions in the literature about the size and direction of the relationship. Indeed, countries' corruption levels differ according to the economic and social structure. In this context, since it is thought that the corruption perception index is closely related to the development levels of the countries, in the study, the effects of various variables, which represents the levels of development, on the corruption perception index are tried to be measured. In the study, to determine the relationship between the corruption perception index and the development indexes, the data for 120 countries are analyzed by separating the countries into three groups as low, middle and high income countries according to the classification made by the World Bank and are analyzed by panel data analysis method including 2007-2016 period. Economic development, governance, level of education, political stability and social capital indexes are considered as variables that are thought to represent countries' socioeconomic development. In the analysis results; we find out that socioeconomic factors which determine community structure have a significant effect on the corruption perception index. Especially the fact that the governance variable is highly economically and statistically significant for all country groups shows that it is the most important variable in policy determination for the prevention of corruption activities.
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