Dr. Ahmad M. Mashal
Over the past few decades, the issue of corruption, in terms of the abuse of public office for private gain, has attracted both academicians and policy makers. Corruption scandals, as well as other reasons, have toppled governments in both major industrial countries and developing countries. Corruption, per se, is a phenomenon that exists in societies from an early age. In fact, it is a phase which all countries go through before they reach maturity. In developed countries, social, political and judicial reforms are now intertwined and streamlined to reduce cases of corruption. This practice has now been prompted with the conception that, at least in developing countries, corruption is a serious obstacle to development. To date, no empirical research has yet been conducted to provide evidence that these elements fully describe corruption. This text is left to further research. Regression analysis shows that when a country manages to improve its standing on the corruption index from 6 to 8, it will experience a 4 percent point increase in its investment rate and a 0.5 percent point increase in its annual per capita GDP growth rate. In addition, the government of the country in question will raise its spending on education by 0.5 of 1 percent of GDP. Those large effects suggest that policies to curb corruption could have significant payoffs. This paper aims at conducting an empirical investigation of the relation between the level of development in developing countries and their standing vis-a-vis the corruption index. In this context, the paper will test the relation between Corruption and distortion resource allocation in ESCWA countries as the required data is available. This paper concluded that one point improvement of corruption will increase public spending on education and health by 0.016 and 0.07 of GDP respectively.
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