Government size and corruption perception: some lessons for Iran from worldwide experiences

Policies of resistance economy focus on rationalizing the government size, and also preventing activities and fields, which lead to corruption in different economic sectors. This paper is aimed to study the global experiences about the size of the government and corruption. In order to measure the government size, two criteria are considered: government expenditure to gross domestic production and the number of employees in public section. Furthermore, the degree of corruption is calculated by corruption perception index. These indexes are collected for the periods of 2002-2012 and 2009-2013 from international transparency organization, the World Bank, and international labor organization. The results of panel data regressions show that the effect of government size on the corruption index depends on the development degree of the countries. In another word, an increase in the government size in the developing countries prepares the ground of corruption. In the view of policymaking and subject to the level of development in Iran, reducing the size of government will provide the conditions for reduction of corruption.