WHETHER CONTROL OF CORRUPTION MATTERS FOR HAPPINESS: EVIDENCE FROM PANEL DATA ANALYSIS

Abstract

Purpose- Paper aims to give empirical evidence on the impact of control of corruption on happiness as a proxy of social progress by collecting panel data for 59 countries over the period 2007-2016.

Methodology- Initial as well as extended model that controls for government consumption are estimated using linear static and dynamic panel data estimators. In order to test for the sensitivity of the results and to estimate short- and long-run coefficients, panel ARDL framework is employed.

Findings- The results of linear static and dynamic panel data estimators indicate the significant positive impact of control of corruption on happiness in both, initial and extended models. ARDL model reports a significant relationship between control of corruption and happiness in initial and extended model only in the long-run.

Conclusion- The convergence process from corrupt to hones politics is complex and is likely to be achieved only in the long-run period.

Keywords

• ARDL,control of corruption,happiness,panel,social progress

References

1. Aidt, S. T. (2009). Corruption, institutions and economic development. Oxford Review of Economic Policy, vol. 25, no. 2, p. 271-291, https://doi.org/10.1093/oxrep/grp012
2. Attaoui, I., Ammpurim B., Gargouri, I. (2017). Causality links among renewable energy consumption, CO2 emissions, and economic growth in Africa: evidence from a panel ARDL-PMG approach. Environmental Science and Pollution Research, vol. 24, no. 14, p. 1306- 13048, https://doi.org/10.1007/s11356-017-8850-7
3. Balboa, J., Medalla, E. M. (2006). Anti-corruption and governance: the Philippine experience. APEC Study Center Consortium Conference.2006/ASCC/014.
4. Blackburn, K., Bose, N., Haque E. M. (2006). The incidence and persistence of corruption in economic development. Journal of Economic Dynamics and Control, vol. 30, p. 2447-2467.
5. Clark, A. E., Fléche, S., Senik, C. (2014). Economic growth evens-out happiness: evidence from six surveys. SOEPpapers on Multidisciplinary Panel Data Research, no. 633.
6. Fereidouni, H. G., Najdi, Y., Amiri, R. E. (2013). Do governance factors matter for happiness in the MENA region?. International Journal of Social Economics, vol. 40, no. 12, p. 1028-1040 https://doi.org/10.1108/IJSE-11-2012-0208
7. Kéita, K. (2011). Essays on corruption and economic growth: a theoretical and empırical evidence. University of Tampere, Finland .
8. Klitgaard, R. (1998). Strategies against corruption. Agencia Española de Cooperación Internacional http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.454.9660&rep=rep1&type=pdf.

9. Knott, J. H. (2012). Corruption, social inefficiency, and economic development in China and the United States. Lien China Development Forum, China.
10. Mahmood, M., Mahmood, E. (2016). Foreign direct investment, exports and economic growth: evidence two panels of developing countries. Economic Research-Ekonomska Istraživanja, vol. 29, no. 1, p. 938-949.
11. Muslija, A., Satrovic, E., Unver Erbas, C. (2017). Panel analysis of tourism -economic growth nexus. International Journal of Economic Studies, vol. 3, no. 4, p. 535-545.
12. Paldam, M. (2002). The cross-country pattern of corruption: economics, culture and the seesaw dynamics. European Journal of Political Economy, vol. 18, no. 2, p. 215-240.
13. Pesaran M.H., Shin Y., Smith R.P. (1999). Pooled mean group estimation of dynamic heterogeneous panels. J Am Stat Assoc, vol. 94, p.621-634.
14. Popova, Y., Podolyakina, N. (2014). Pervasive impact of corruption on social system and economic growth. Procedia - Social and Behavioral Sciences, vol. 110, p. 727–737, doi: 10.1016/j.sbspro.2013.12.917.
15. Shera, A., Dosti, B., Grabova, P. (2014). Corruption impact on economic growth: an empirical analysis. Journal of Economic Development, Management, IT, Finance and Marketing, vol. 6, no. 2, p. 57-77.
16. Voskanyan, F. (2000). A study of the effects of corruption on economic and political development of Armenia. American University of Armenia.
17. Weder, B. (2002). Institutions, corruption and development and their ramifications for international cooperation. UNU Millennium Series, Tokyo: United Nations University Press. Working Papers, 02/213.
18. World Happiness Report. (2017). Source: http://worldhappiness.report/wp-content/uploads/sites/2/2017/03/HR17.pdf.