The Impact of the Rule of Law and Control of Corruption on Economic Growth: International Evidence With Panel Bias Corrected LSDV Analysis
Chapter from the book:
Ertürkmen,
G.
(ed.)
2024.
Academic Analysis in Macroeconomics.
Synopsis
This study examines the impact of corruption control and the rule of law on economic growth. Annual data for the period 1990-2023 were used in the study conducted on 134 countries. Panel data analysis was used in the study and bias-corrected LSDV analysis was used to perform econometric analysis. As a result of the study, the first finding is that increasing the control of corruption in countries positively affects economic growth. The strategies and policies implemented by countries in the fight against corruption have a positive impact on economic growth. The second finding is the relationship between rule of law and economic growth. It was observed that most of the countries have negative values in the rule of law index. This situation indicates that the countries have not made significant progress in the rule of law. As a result of the empirical analysis, the effect of this backwardness in the rule of law on economic growth was found to be negative. Developments in the rule of law are important for economic growth. For this reason, it is recommended that countries develop and implement rule of law policies.