Track: Decision Sciences

Abstract

A number of economists argued that corruption can have a positive effect through parallel and negative economic flow creation. As the results, corruption is needed as the wheel’s grease for the economy. They saw that corruption as an economic and social positive instrument and redistributive instrument. On the other hand, there is a big consensus in the literature about the impacts of corruption on economic growth. The corruption impact on economic growth occurs in specific context and is associated with many factors, such as the law apparatus and institutional framework, the quality of government, and political regime. In a number of countries that have no effective government institution and system, corruption can be a compensation tool for government barrier and institutional weakness. This study was aimed to examine the factors of corruption. The data used in the study were from the World Bank covering 126 countries with different years with the number which was not always the same. The data were analyzed using the multiple regression model. The dependent variable was the bribery incidence (percentage of firms experiencing at least one bribe payment request). The independent variables were annual GDP growth (%), individuals using the Internet (percentage of population), and informal payments to public officials (percentage of firms). The results of the study show that higher bribery incidence was associated with higher economic growth, lower internet use, and higher informal payments to public officials.

Key words: corruption, bribery, economic growth, information technology, internet.