Are performances in Governance Indicators Complementary to Corruption Abatement?

Abstract

Private use of public office for private gain could be a tentative connotation of corruption and most distasteful event of corruption is that it is not there, nor that it is pervasive, but it is socially acknowledged in the global economy, especially in the developing nations. In the present paper we attempt to assess the interrelationship between the Corruption perception index (CPI) and the principal components of governance indicators as per World Bank Governance Indicators like Control of Corruption (CC), Rule of Law (RL), Regulatory Quality (RQ) and Government Effectiveness (GE). Applying Granger Causality Test the study observes a mixed or inconclusive result. Only bilateral causal link between the CPI and CC works for UK, whereas there are unilateral causal links between the CPI and one or more governance indicators working for other countries for France, Japan, China, India, Thailand and South Africa. In no way causalities are observed for USA, Germany and Brazil.