Long-Term Effects of Corruption Control and Economic Freedom on Economic Growth

Abstract

Theoretical models and empirical evidence show that corruption control and economic openness have effects on economic growth. This paper aims to estimate the long-term effects of the anti-corruption effort and economic freedom on economic growth in a sample of 121 countries. We use autoregressive distributed lag (ARDL) models and estimation techniques appropriate to the case where there is a correlation between cross-section errors possibly generated by spillover effects. Besides, estimates of ARDL models are consistent even with endogenous regressors and integrated variables. The results indicate that economic growth of a country can be positively and significantly affected by the long-term corruption control and economic freedom.