Socioeconomic development and corruption: A global panel regression analysis, 2005-2019

The institutional weakness of political systems may represent a constraint to social development, being in principle more frequent in disadvantaged countries than in advanced economies. The present study illustrates the results of a panel analysis run on a global sample of affluent and emerging economies and aimed at demonstrating that the relationship between corruption — a serious institutional deficiency — and per capita income is asymmetric. The empirical results of the statistical analysis suggest that the increase in income in high-income countries was associated with a decline in perceived levels of corruption, while it was related to an increase in structural corruption in low-income countries. Based on these findings, the authors argue that the effective control of corruption cannot be interpreted as a ‘quasi luxury good’, the demand of which increases once the level of income rises to a certain level. The adoption and effective implementation of appropriate long-run policies and institutional reforms seem to be the only way to contain corruption.