Influence of Corruption on Economic Growth

Student: Chernikov Daniil

Faculty: International College of Economics and Finance

Educational Programme: Double degree programme in Economics of the NRU HSE and the University of London (Bachelor)

Final Grade: 7

Year of Graduation: 2016

In this paper, I investigate the influence of corruption on economic growth and development. Corruption level is counted by new instrument – percentage of cashless transactions in the economy. It is estimated by the proxy, using cash in the economy and overall monetary base. The usage of instrumental variable solve the problem of endogeneity and measurement errors. Panel data consists of 86 thousands observations for 214 countries over 36 years (1960-2015) and 23 variables. Empirical analysis shows, that corruption does not significantly influence economic growth. However, the strong evidence can be found in favor of its influence of economic development. Results are robust both for developed and developing countries.

Full text (added June 15, 2016)

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