Modeling the impact of macroeconomic indicators on the Corruption Perceptions Index: Example of Ukraine, Bulgaria, and Georgia

Abstract

AbstractThis article is devoted to the analysis of corruption problems in Central and Eastern European countries. As it is difficult to measure the volume of corruption, this article makes use of the Corruption Perceptions Index (CPI) from Transparency International as the main indicator of corruption levels in countries. Three countries – Ukraine, Bulgaria, and Georgia – are taken as examples, and by using macroeconomic modeling, which macroeconomic factors determine the rank of the state in the Corruption Perceptions Index on the basis of data analysis from 1998 to 2019 was researched. The Corruption Perceptions Index is taken as the dependent variable, and a plurality of factor characteristics includes general macroeconomic variables such as consumption, healthcare, taxes, foreign investment, and so on. The results of the calculations determine which macro indicators should be given attention to not only to reduce the level of corruption in the public sector, but also to increase the country’s position in the CPI. In addition, a system for preventing and fighting corruption is proposed, indicating anti‐corruption measures, expected results, and identifying certain components of this system’s functioning quality.