A Statistical Analysis of Public Sector Corruption and Economic Growth

This study reports on the results of a statistical analysis in which the relationship between the independent variable of corruption, as measured by the World Bank, and the dependent variable of economic growth, as measured by percentage of GDP growth per year, was examined. The purpose of this study is to apply empirical methods to the debate on corruption and growth, in which neoclassical theory predicts that corruption retards growth but in which other models, such as Lewis growth and the Kuznets Curve, suggest that corruption may actually speed up growth in underdeveloped countries. The main finding of the study is that there is in fact a positive correlation between corruption and GDP growth for ten randomly-chosen countries evaluated from 1999-2010. Further research is recommended as a means of determining the relationship between corruption and growth in both mature and immature economies.