ROLE OF CORRUPTION AND ITS IMPACT UNDER VARIOUS REGIMES: CROSS COUNTRY ANALYSIS

Abstract

Many empirical studies investigate relationship between democracy and corruption by considering democratic and non-democratic regimes. There are many economies which are not fully democratic and autocratic, so there is a dire need to explore these relationships in case of other two categories of political regimes, such as flawed democracies and hybrid regime. Does this relationship equally hold in these political regimes? This study gauges out the linkages between corruption and economic growth for all plausible cases of political regimes. Empirical analysis includes sample of 159 countries based on different political regimes, consisting on 20 full democracies, 55 flawed democracies, 39 hybrid regime, and 53 authoritarian regimes. The data are taken from the period of 2006 to 2019. The sophisticated empirical Bayesian estimation procedure is employed to explore the association between growth and socio-economic variables. The results indicate that corruption in case of mature democracies has no significant effect on economic growth While in autocracies has significant positive effect on economic growth. However, corruption has negative effect on economic growth in flawed democracies and hybrid regime