The effect of corruption on human development in selected Islamic countries (an approach from the ARDL panel model)

Abstract

Introduction: Corruption, as a deterrent to equitable development, is recognized as a contentious issue in the field of institutional quality and political economy. The literature on the impact of corruption on economic growth often addresses the issue that corruption has had a negative impact on economic growth and development. But some economists believe that corruption has had a positive effect on economic growth. The purpose of this study is to investigate the impact of corruption on human development in the long and short term for developing Islamic countries during the period of 2000 to 2017. Method: The method of this study is the use of panel statistical data based on the Pooled Mean Group (PMG) model. The corruption index used in this study is the corruption control index introduced by the World Bank. The control variables in this study include trade openness and economic growth. Finding: The results showed that in the long run, the corruption reduction index has improved the human development index. But in the short run, this index has had a positive effect on the human development index in the selected countries. Discussion: The negative impact of corruption on human development shows that corruption hinders the improvement of human development indicators, which are education, health, and economic growth in the long run. Therefore, policymakers must adopt the necessary policies to reduce corruption in order to improve the status of the human development index and therefore human welfare.