Analyzing the effects of corruption on the economic growth: A cross-sectional regression analysis on SAARC Region


Amit Tripathi*

The impact of corruption in economic development is one of the widely studied topics in economics worldwide. This study is an attempt to understanding the relationship between the level of corruption and economic growth of the SAARC region. SAARC stands for South Asian Association for Regional Cooperation. There are currently eight member countries in the SAARC namely, Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka. The SAARC consists of 3% of the world area, 21% of the world population and 3.8% of the global economy. All of the member countries of SAARC are developing countries. Taking into account the data of level of corruption in SAARC region (as measured by the CPI) and economic growth (as measured by Gross Domestic Product per year), for time period 2000-2017, this research seeks to impact of corruption on a country’s GDP while holding other determinants exports, unemployment rate, population growth, years of schooling and capital formation constant. The research will be based on the literature review and empirical analysis of the articles dealing with the economy and corruption of the SAARC region. The result of the research reveals that there is a negative relationship between economic growth and level of corruption. The author tries to provide some relevant policy implications for SAARC countries based on our research and findings.

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