Abstract

The main objective of the study is to examine the effect of corruption on economic development over the period of 1996-2021.The time series analysis of data is taken from transparency international and world development indicator (WDI). The dependent variable utilized in the study is gross domestic product (GDP) Corruption, Inflation and Trade openness has been used as independent variable. The first applied the unit root test and the result shows that all variables are integrated at the first difference. Johansen cointegration test technique is applied for cointegration and vector error correction model (VECM) applied for long run and short run analysis in the case of Pakistan. There exist long run relationship among the variables and short run relationship is not exist. Empirically outcomes show that trade-openness has a positive effect on growth. Inflation and the corruption has the negative effect on growth rate of GDP.

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