The Impact of Corruption on Economic Growth in Tunisia

Abstract

This chapter aims to examine the impact of corruption on economic growth in Tunisia between the years 1998 and 2018.Using time series data to obtain relationships of an empirical nature. The processing of time series data starts with checking individual series, and ADF and Zivot and Andrews tests help identify variables' stationarity. The mixed order of integration levels recommends using ARDL to obtain the long-run relationships between the variables. The estimation results confirm that corruption demoralizes and discourages private investment in the short and long run. In both the long and short run, the indirect impact of corruption is negative and insignificant for public spending. However, the interaction between human capital and the corruption perception index is positive and insignificant in the short run but negative and significant in the long run.