Deciphering the links: evaluating central bank transparency impact on corruption perception index in G20 countries

Abstract

Purpose This study aims to explore the relationships between GDP growth, education spending, central bank transparency (CBT) and accountability on the corruption perception index within the G20 countries, emphasizing their combined effects and interdependencies. Design/methodology/approach Using the central bank transparency index (CBTI) introduced by Dinçer et al. (2019), an analysis spanning from 2002 to 2019 was conducted on selected G20 countries, further refining the results by excluding EU members. Data sources included World Bank statistics and CBTI data. The research deployed the heteroskedastic and contemporaneously correlated panel-corrected standard error model to detail the effects of the aforementioned factors on the corruption index. Findings The study revealed no statistical evidence that economic growth had an effect on reducing corruption. Education spending emerged as a potent tool in curbing corruption, especially in EU nations. A strong correlation was identified between CBT and reduced corruption, consistent across G20 countries, regardless of EU affiliation. The insights emphasize the importance of enhancing education spending and CBT in combating corruption. For effective anti-corruption measures, countries are encouraged to invest more in education, amplify internal checks and adopt transparent central bank policies. Further research could delve into cultural, historical and political variables to understand corruption dynamics comprehensively. Originality/value This study aspires to address the existing gaps in the literature and provide a substantial contribution to the ongoing discourse and efforts to understand and mitigate corruption within the G20 countries and globally.