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https://www.scirp.org/journal/tel
ISSN Online: 2162-2086
ISSN Print: 2162-2078
Department of Management Science and Technology, Laboratory of Data Science and Digital Transformation, University of
Peloponnese, Tripolis, Greece
Keywords
Corruption, GDP Per Capita, Economic Growth, European Countries, GIS,
Per Capita GDP Growth Rate
1. Introduction—Measuring Corruption
Corruption is measured using questionnaires designed by certain companies. As
these questionnaires focus on the experiences of individuals or groups, they
contain subjective data. The results of these surveys are published in the form of
specific or composite indicators (Mocan, 2008). Some of these indicators are:
economic growth of a country. However, apart from the per capita GDP growth
rate of a country, it is also of particular significance whether the per capita GDP
converges at some level, determined by the internal factors of a country’s economic
policy or by externally imposed criteria set for the country (Anastasiou et al., 2022;
Anastasiou et al., 2021). The basic condition for convergence is the negative relation
of the per capita GDP growth rate (gyi) of the country (i) and the per capita GDP
(yi) of the same country (i). This relationship as a function has the form:
g yi = f ( log yi ) (1)
where:
gyi = The per capita GDP growth rate of the country (i)
yi = The per capita GDP of country (i)
For a constant growth rate ( g yit1t2 ), Equation (1) is written as:
g yit1t2 ⋅∆t
yit2 = yit1 e (2)
where:
g yit1t2 = The mean per capita GDP growth rate of country (i), during the pe-
riod of time Δt (where Δt = t2 – t1),
yit1 = The initial per capita GDP of country (i) at time (t1)
yit2 = The final per capita GDP of country (i) at time (t2)
And in logarithmic form:
(
g yit1t2 = ln yit2 − ln yit1 ) ∆t (3)
For (t1 = t) and (t2 = t + 1), i.e. for a period of time of one year, then Δt = 1
and Equation (3) is written as a logarithmic difference for the estimation of the
annual per capita GDP growth rate:
=
g yit ( t +1) ln yi ( t +1) − ln yit (4)
To take into account socio-economic factors, Barro (Barro, 1991) used an em-
pirical form of Equation (4), which includes a set of variables such as health sys-
tems and schools. His equation is as follows (Akçay, 2002):
=
g yit1t2
a log yit1 + cX + d (5)
where:
X = A group of variables which include socio-economic effects
a, c, d = Constants (α < 0 for the cases of economic convergence)
Mauro (Mauro, 1995) analysed the relationship between corruption and an-
nual economic growth over a period from 1960 to 1985, using data from the BI
corruption index for 67 countries for the time period 1980-1983. He found that
countries with low levels of corruption had higher average annual growth rates
than countries with high levels of corruption. He also found that the improve-
ment of the corruption index had a positive effect on GDP growth and invest-
ment. This was largely due to the fact that the improvement of the corruption
index by one degree increased GDP per capita by 0.5% and investment by 5% of
GDP per year. Using the extended Barro equation (Equation (5)), Mauro
where:
Corit1 = Corruption index of country (i) at time (t1)
X = A group of variables which include socio-economic effects
a, b, c, d = Constants (a < 0, b > 0)
Mauro (Mauro, 1998) used the ICRG index for 1982 to 1995 and the BI index
for 1980 to 1983. For a sample of 106 countries, he studied the effect of corrup-
tion on growth and investment, where the dependent variables were the average
rate of investment and GDP growth for each country. Mauro found that coun-
tries with improvement of the corruption indices by a single unit, had a 4%
higher investment growth rate and a 0.5% higher GDP per capita growth rate,
over the time period from 1960 to 1985.
Ehrlich and Lui (Ehrlich & Lui, 1999) found that countries with higher levels
of corruption had lower economic growth rates. They studied the data from 152
countries from 1960 to 1992 and found that the higher the level of corruption,
the lower the rate of growth, while it became clear that the impact of corruption
on economic growth in developed countries is lower.
Also, Akçay (Akçay, 2002) studied the effect of corruption on economic
growth for 54 different developing countries over a period from 1960 to 1995.
He used Mauro’s equation (Equation (6)), which calculates the Mauro index (X)
with 8 variables (population growth, inflation, government expenditure as a
percentage of GDP, ratio of students to teachers, ratio of gross domestic invest-
ment to GDP, etc.) in addition to the corruption index ICRG. Akçay found that
countries with low levels of corruption had higher rates of economic growth
than countries with a high corruption index.
Podobnik et al. (Podobnik et al., 2008) found that functional dependence can
be modelled with a power law function as follows:
CPI = Ny µ (8)
where:
Ν = Coefficient (Ν > 0)
Podobnik et al (Podobnik et al., 2008), using 2006 data, found that the value of
the exponent (μ) was about 0.23, while the value of coefficient (N) was about
0.56, using the [0, 10] scale of CPI.
Also, Podobnik et al. (Podobnik et al., 2008) used data from the five-year pe-
riod 1999 to 2004 to determine the relationship between changes in the CPI val-
ues [Δ(CPI)] and changes in the GDP annual growth rate (g), as follows:
g yit1t2 = ( )
m∆ CPI it1t2 + ui (9)
where:
ui = Constant
For almost all countries, it was found that in all countries there is a positive
slope (m) of the straight line expressed by Equation (9), equal to 0.09. Therefore,
each unit increase in the CPI of the [0, 10] scale indicates a 1.7% increase in the
annual GDP growth rate (g). Podobnik et al. (Podobnik et al., 2008) used Equa-
tion (4) to estimate the average per capita GDP annual growth rate (g), knowing
the change in CPI value [Δ(CPI)].
Vlachos (Vlachos, 2013), studying the relevant scatter diagram on a log-log
scale for 172 countries, for the period of time 1993-2012, found that the apparent
linear relationship provided exponent values (μ) of Equation (8), equal to 0.21.
For low-income countries, he also found that there is no positive exponential re-
lationship between (CPI) and the average per capita GDP (y). Also, for a total of
119 countries and for the period of time 2003-2012, he found that the linear
trend line of Equation (9) showed a positive slope (m) equal to 0.149 for all
countries. For the group of high and upper-middle-income countries, he found a
positive slope equal to 0.173 and for the group of lower-medium countries and
low income countries he found a small positive slope equal to 0.042.
Finally, Papageorgiou et al. (Papageorgiou et al., 2018) studied the relationship
between the average GDP per capita (y) at current prices, in $ U.S. and the average
corruption perception index (CPI), during the decade 2006-2015 in Europe, and
the relation between the average per capita GDP growth rate (g) and the change of
the average corruption perception index [Δ(CPI)] during the same time period in
Europe. They showed that the value of exponent (μ) of Equation (8) was equal to
0.3393 for all European countries, 0.3451 for the 31 countries of the European
Economic Area, was 0.3476 for the 28 countries of the European Union and 0.3047
for the 19 countries of Euro Zone. They also found that the value of the slope of
the straight line (m) of Equation (9) was equal to 0.0186 for all European coun-
tries, 0.0135 for the 31 countries of European Economic Area, 0.0136 for the 28
countries of European Union and was 0.0164 for the 19 countries of Euro Zone.
4. Examining the Relation of CPI & per Capita GDP and Use
of GIS
In the present study, we examined the relationship between corruption and in-
come levels in Europe for the period 2005-2021. Specifically, we studied 1) the
relationship between the average per capita GDP (y) at current prices, in $ U.S.
and the average corruption perception index (CPI), during the mentioned time
period, and 2) the relation between the average per capita GDP growth rate (g)
and the change of the average corruption perception index [Δ(CPI)] during the
same time period. The source of the values for per capita GDP was the Word
Bank, while source of the values of CPI was the Transparency International or-
ganization. For the purpose of this survey Equations (8) and (9) were used, while
all used values of CPI before 2012, having values of [0, 10] scale, were converted
to [0, 100] scale in order to obtain compatibility for our analysis.
The groups of European countries used were:
• 46 European countries (ALL European countries).
• 31 countries member states of the European Economic Area (EEA-31).
• 27 countries member states the European Union (EU-27).
• 19 countries member states of the Euro-zone (EZ-19).
• 15 countries including Central and Eastern Europe countries, Turkey and
Kazakhstan, which are not members of the EU and EEA (CEE-15).
GIS is effective at processing data and presenting the results in many visual
formats. This is because GIS provides access to data from multiple sources
through feedback loops. They can also be used for data integration, modelling,
simulation and analysis. GIS is also a platform for creating a flexible, dynamic
and adaptive framework for integrating geospatial data. With the proliferation of
programming and scripting languages, new spatial analysis and visualisation capa-
bilities are becoming available through the use of spatial libraries. This is because
current GIS packages are effective at handling complex data thanks to their data-
bases and languages combined with them (Murray, 2010; Sritart & Miyazaki, 2022).
In the current study, the obtained results for the five European regions and
the corresponding values of exponent (μ) and slope (m) were used as a geospa-
tial database in order to produce charts as visual information about the relations
of CPI and & per capita GDP, using GIS.
As shown in Table 1, Figures 1-3, for all European countries, there is a positive
Group of countries Exponent μ (Equation (8)) Sig. Slope m (Equation (9)) Sig.
46 European countries 0.3378 0.000 0.0181 0.000
31 EEA countries 0.3382 0.000 0.0183 0.001
27 EU countries 0.3384 0.000 0.0188 0.004
19 EZ countries 0.2947 0.000 0.0187 0.036
15 non-EU TCEE countries 0.0031 0.0003
Source: Authors’ calculations. Red numbers denote that there is no statistical significance.
Figure 1. Classification of European Countries according to their mean value of CPI during the period of time 2005-2021.
relationship between the level of corruption (CPI) and the per capita GDP (y),
represented by the exponent value (μ), equal to 0.3378. This value is 0.3382 for
the 31 countries of the European Economic Area, 0.3384 for the 27 countries of
the European Union and 0.2947 for the 19 countries of the Eurozone. In general,
it is obvious that if two countries within the European Economic Area, the Eu-
ropean Union or the Eurozone, have different CPI values, then these countries
Figure 2. Classification of European Countries according to their mean value of GDP pc during the period of time 2005-2021.
should also have different values in their per capita GDP, so that the country has
the higher CPI value (i.e. lower perceived corruption), its GDP per capita has
also a higher value. It was confirmed that there is a statistically significant posi-
tive exponential relationship between the average CPI and the average per capita
GDP, in most European countries. However, for the 15 countries of the Central
and Eastern European countries, including Turkey and Kazakhstan, which are
not members of the European Economic Area, the European Union or the Eu-
rozone, the exponent values (μ) are almost zero (0.0031), but without statistical
significance.
Regarding the relationship between the average growth rate of GDP per capita
(g), and the change in the average corruption perception index [Δ(CPI)], as
shown in Table 1, Figure 4 and Figure 5, there is a positive linear relationship
between the average growth rate of GDP per capita and the change in the cor-
ruption level, for all European countries, expressed by the slope of the straight
line (m) which is 0.0181. This means that for every unit increase in the CPI value
in the [0, 100] corruption scale, the average per capita GDP annual growth rate
will increase by 1.81%. The corresponding values are 1.83% for the 31 countries
of European Economic Area, 1.88% for the 27 countries of European Union and
1.87% for the 19 countries of Eurozone, indicating a statistically significant posi-
tive relationship between the growth rate of GDP per capita and the change in
the CPI. Finally, for the 15 countries of Central and Eastern Europe countries,
including Turkey and Kazakhstan, which are not members of the European
Economic Area, the European Union or the Eurozone, for every unit of increase
in the CPI value, the growth rate of GDP per capita will increase by 0.03%, al-
though the result for the last case is not statistically significant.
5. Conclusion
Data shows that higher levels of corruption lead to lower GDP per capita. This
has been demonstrated by previous statistical analysis. However, some countries
such as Turkey, Kazakhstan and Central and Eastern Europe don’t follow this
trend. CPI scores have a significant positive correlation with GDP per capita for
each country. This is because different countries with different score values also
have different GDP per capita values.
After reducing corruption, European economies grew faster. This was evident
Figure 5. Relation between per capita GDP annual growth rate and Δ(CPI)/year.
when looking at data from all European countries except the EEC and EZ coun-
tries. Moreover, a positive relationship between GDP and corruption was ob-
served - with more than half of European countries showing a significant in-
crease in both economic growth and prosperity.
Conflicts of Interest
The authors declare no conflicts of interest regarding the publication of this pa-
per.
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Appendices
Appendix 1
Table A1. Sub-indices for the estimation of Corruption Perception Index (CPI).
Code Description
Table A2. Corruption perception indices of all European countries for years 2005-2021.
Source: Transparency International (Transparency International, 2021). : Data Not available. CPI in-
dicators before 2012 have values of [0, 10] scale and were converted to [0, 100] scale in order to obtain
compatibility for our analysis.
Table A3. GDP per capita of all European Countries for years 2005-2021 (current U.S. $).
Source: World Bank (2022). : Data Not available. Data Source: World Development
Indicators. Source URL: http://data.worldbank.org/indicator/NY.GDP.PCAP.CD (World
Bank, 2022b). Last Updated Date: 16/9/2022. Indicator Code: NY.GDP.PCAP.CD.
SOURCE NOTE: GDP per capita is gross domestic product divided by midyear popula-
tion. GDP is the sum of gross value added by all resident producers in the economy plus
any product taxes and minus any subsidies not included in the value of the products. It is
calculated without making deductions for depreciation of fabricated assets or for deple-
tion and degradation of natural resources. Data are in current U.S. dollars.