The Effect of Corruption on Economic Growth in the Light of Governance Variance

Abstract

This research aimed to investigate the effect of corruption on the economic growth in the light of governance variance. Cross sectional data for three years for many countries was fruitfully introduced into empirical research lately. Other independent variables have been included in an econometric model like, education index, investment, foreign direct investment, population growth rate. The mean of governance indexes has been used as an indicator to governance quality. It was concluded that corruption has significant negative effect on economic growth. This effect varied from country to another according to the governance quality. Research showed that these countries have good governance suffer weakly from corruption, but the effect of corruption become bigger in the countries that have poor governance. It is found also that corruption is the most important variable affect economic growth in the countries that have poor governance.