USING SIMULTANEOUS EQUATIONS MODELS TO ANALYZE THE CAUSES OF CORRUPTION AND ITS IMPLICATIONS

Abstract

For a country that is in the process of integration into EU structures, reducing the corruption is a good sign for attracting foreign investment and developing the economic environment. The paper estimates the parameters of a simultaneous equation model based on data sets obtained at a sample of employees in public administration. Statistical sample consist in 407 people and the maximum allowable error was estimated at ± 2.5%. For the effective development of the statistical questionnaire we identified major themes of public administration that are directly related to the problem of corruption: managing the institution, the civil service, transparency in the system, the decentralization process, causes and effects of corruption and the quality of the reform in the public administration. Based on the questionnaire we defined primary and secondary variables that have been used to define the model with simultaneous equations. For the variables in the model they have been divided into endogenous and exogenous.

Keywords

• simultaneous equations model
• two stages least square method
• corruption
• public health system
• Hausman statistics