A Study of Indirect Corruption's Effect Channels on Economic Growth; Using Corruption Perception Index

Literature review on corruption and its effect on economic growth has a long history, especially after 90’s decade, tendencies towards this filed increased rapidly. Most of the researches focus on the direct effect of corruption on economic growth and there are limited studies on indirect effect of corruption on economic growth. So in this research we are looking for transitions channels of indirect effect, and also we estimate rentier and non-rentier economies in separate groups and compare their differences. For this purpose, the data of Corruption Perception Index (CPI) from Transparency International, in the 53 selected rentier and non-rentier economies, during the years 2013-1996 is used. We also used simultaneous equations estimation method (3SLS). The results showed that the corruption index (CPI) has an indirect negative effect on economic growth in the study and most important transitions channels are investment, human capital, government spending and political instability.