Corruption and Economic Growth

In the last two or three decades, corruption has become a noticeable issue in many countries, especially in developing countries where it has serious effects on the economy. In this paper, the effect of corruption on economic growth will be examined through literature and researches that involve the effect of corruption in economic growth followed by cross-sectional regression analysis to the issue. The focus will be on how much corruption and how much corruption control are present for each country. other different variables that could be expected to affect the economic growth for this period will also, be examined. To answer this question, corruption control as an independent variable while economic growth is the dependent variable will be examined. The second question would be to study corruption control as a dependent variable while using a set of variables as independent variables and see how much they would affect corruption control. Finally, a case study that draws a comparison between the economy in Germany and South Korea where the results from the empirical part will be applied to the two countries and the difference between the true reported numbers and the numbers from the OLS equations will be checked and explained. From all the directions been taken to study the subject “literatures, empirical and case study “ the results showed that corruption activities have negative effects on economic growth and although it might be in some cases shown to be insignificant, however, it is very important to minimize the corruption activities by boosting variables such as corruption control, rule of law, stability and also education as it is shown that the more years of education will decrease the levels of corruption in some cases. The conclusion here will be, although corruption may have more effects in some economies more than others, to combat corruption that will take a global effort. The countries that may not suffer greatly from it may be caught in the cost of cleaning it by having to support failed economies. Or worse, corruption may be increased to levels that it could not be ignored