Level of Corruption, Institutions and Economic Growth: Comparative Analysis from Developed and Developing Countries

Atdhetar Gara and Xheneta Ujkani
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Atdhetar Gara: Faculty of Business and Economics, South East European University, Tetovo, North Macedonia
Xheneta Ujkani: Faculty of Economics, University of Pristina, Pristina, Kosovo

Economic Alternatives, 2026, issue 2, 574-585

Abstract: This study aims to analyze the factors influencing corruption levels across developed and developing countries, focusing on the roles of institutional quality, sustainable economic growth, income per capita, and human development in shaping corruption outcomes. The study also investigates the comparative differences in corruption levels between these two groups of countries. The analysis utilizes a quantitative approach based on secondary data from 27 European Union countries, covering the period from 2010 to 2022. Using a 13-year panel dataset of 351 observations, the study applies econometric models suited for panel data— specifically, fixed effects and random effects models. Findings reveal that institutional quality significantly reduces corruption levels (B=0.58), while human development shows a positive association with corruption (B=11.56). Conversely, income per capita exhibits a negative relationship with corruption (B=- 0.98). The fixed effects model shows a high explanatory power (R-squared=77.61%) and confirms no multicollinearity (VIF=1.59) and homoscedasticity (p=0.6636). Results also highlight that developed countries experience higher corruption levels compared to developing countries (B=3.97).

Keywords: economic growth; corruption; Institutional Quality; Income per Capita; Developed and Developing Countries (search for similar items in EconPapers)
JEL-codes: D73 E02 F43 O11 O57 (search for similar items in EconPapers)
Date: 2026
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