CORRUPTION RANKING OF NATIONS AND ITS ASSOCIATION WITH ECONOMIC VARIABLES

The phenomenon of corruption seems to have pervaded countries and societies. Generally, poorer (less prosperous) nations have been found to be among the most corrupt nations in corruption rankings conducted by organizations of international repute. nations with higher proportion of economic activity in services are also seen to follow the same trend. These hypotheses have been tested empirically, using the corruption score data from the website of Transparency International; and per capita GDP (measure of prosperity) and service sector size data from the World Bank website. This paper finds that higher per capita GDP and the service sector size of a nation are associated with lower level of corruption in a nation. However, the levels of corruption in a developing nation can be better explained by the variables of per capita GDP and service sector size as compared to levels of corruption in developed nations. This can lead to policy implications for corruption eradication from the developed world as well as the developing world by the use of different methods. The paper also surveys the methods of corruption measurement with special emphasis on the methodology of Transparency International.