Corruption and its Effect on Economic Development in Chile, Mexico, and Brazil

In this paper, the effect of the perception of corruption on economic development will be explored. The research question addressed in this paper is: how does the perception of political corruption in Mexico, Brazil, and Chile affect their economic development? Economic development has increased significantly for all three states since 1990s, but for two of them it has been coupled with rampant corruption. The research question will be explored through a review of the current literature, a discussion of the methods, the presentation of the data and results, and finally a discussion about the results. In order to assess whether frequent corruption scandals affect economic development, the perception of corruption data was be collected from Transparency International’s Corruption Perception Index on all three countries spanning from 1995 to 2017. To measure its effect on economic development, bivariate correlations between the perception of corruption, GDP per capita, Human Development Index (HDI) scores, and FDI in-flows were run to first test to see if there are relationships between the variables at all. Following this, two linear regressions were run, one with GDP per capita as the dependent variable and the other had HDI. The results showed mixed results, as it found a strong positive relationship between the perception of corruption and HDI yet found a strong negative relationship between the perception of corruption and GDP per capita