Impact of corruption, public debt and democracy on economic growth: An analysis of SAARC member countries for the period of 1996 to 2020

Abstract

The purpose of this study was to know the impact of corruption, public debt, and democracy on the growth of economy-centering developing countries, especially six (6) South Asian Association for Regional Cooperation (SAARC) countries, as they are highly affected by it, and this type of research has not been carried out before based on intense literature review. Data has been collected from the World Bank’s reliable indexes, such as; perspective mode and world governance indicator index, and democracy index from the Freedom House Index. Fixed Effect, Random Effect, and Pooled OLS models, have been used to analyze the data for the period of 1996 to 2020. Based on the findings, we may conclude that public debt is significantly and adversely affecting countries' growth, so SAARC countries should form policies to tackle that debt related issues and make it profitable for their countries; although corruption impact is insignificant and negative, and democracy impact is insignificant and positive, so countries' should relax their anti-corruption measures, especially in those sectors that foster economic growth although corruption in the form of money laundering, kickbacks, and non-development projects should be stopped and governments should provide more civil and political rights to its people in SAARC countries, so that will give freedom to choose sincere and honest governments and improve economic growth.