Impacts of economic variables and the corruption perception index on human development

This study aims to find the effects of economic variables which affect the level of human development. Since increasing human well-beings, human development was become the international goal after UNDP launched Human Development Index (HDI). Many countries attempt to raise their standard of livings. But most of nations around the world are facing the corruption problem which is totally obstructs the procedure of development. Thus, the purpose of this study is to assess the impacts of economic variables and corruption on human development and to study their relationships. The data are from statistic yearbooks provided by international organizations with the sample size of 79 countries around the world and range from 2000 to 2010. The study analyzes the data using GMM estimator. The result shows that some of economic variables are significant with corruption such as tax revenue which has a positive relationship with the level of corruption, i.e. higher tax revenue leads to more corruption. Surprisingly, the increase in Human Development Index leads to higher corruption. However, corruption and economic variables do not significantly affect human development.