Corruption and Related Socioeconomic Factors: A Time Series Study

SUMMARY This study examines corruption in relation to political, legal, and economic factors to see how these factors impact corruption over time and to test the direction of causality between these variables. To assess causality, cointegration analysis using an error correction model on data from over 100 countries spanning over 20 years was performed. Three antecedent variables are analyzed in relation to corruption. Over the long‐term, increases in these variables result in decreases in corruption. However, there is no evidence that changes in corruption impact any of these same variables. Interestingly, increases in GDP per capita are found to increase corruption over the short‐term while leading to a long‐term reduction in corruption.