Impact of Psychological, mental, and Socioeconomic Factors on Corruption in South Asia

Abstract

The study empirically examines the effects of socio-economic factor (per capita GDP, level of education and Inflation) on crime (corruption) in South Asia. For empirical analysis panel Co-integration technique is used by using data for four South Asian countries for the period 1997 to 2017. First, it is found that the variables have unit roots at levels but are stationary at first differences, which indicates the possibility of co-integration. Co-integration test results show that long-run co-integrating relationship holds among variables. Fully Modified OLS (FMOLS) and Dynamic OLS (DOLS) methods are applied to find the parameter estimates. The results of long run estimates show that level of education, per capita income reduces the corruption, while inflation increases the corruption in the region. It is also found that growth also increase the corruption. Corruption enhances economic growth by allowing investors to escape bureaucratic interval by the use of “speed money”.