Causality between corruption and the level of GDP

Abstract

© 2016 The Author(s). Interaction between corruption and economic development is one of the most widely studied topics in the recent history of scientific research. Because of the strong influence of both these factors on the standard of living, we have tried to answer the following question: In what time frame is the interaction between these two factors most prominent? Taking into account the data of the level of corruption (as measured by the Corruption Perception Index (CPI) and economic development (as measured by the movement of GDP per year), in the time period from 1995 to 2011, we divided the research results into three time zones: zone 1-which covers the time period of the first five years (short-term impacts), zone 2-which covers the time period of the next five years (medium-term impacts), and finally zone 3-which covers the time period of the last five years (long-term impacts). Based on the research results, we have come to conclusion that the strongest causality between these two factors are in zone 2, the so-called medium-term framework. The empirical findings of this article suggest that further research in this direction is necessary, if we take into account the fact that corruption is present in almost all countries of the world.