Economic analysis of corruption and empirical analysis of determinants of corruption

Using the power of public officals in a way that is wrong for their private interests, defined as corruption, has shown its effect almost every society throughout history. Corruption which includes various actions such as bribery and nepotism, is a crucial economic problem for societies. In the literature, there are several researches that is aiming at fixing what are the determinants of this problem. The first purpose of this study is examining which direction and magnitude do economic, social, culturel and political factors affect the level of corruption by means of academic studies in the litarature. In this respect, national income per capita, economic freedom, human development, protestanism and democracy variables which are intensively used by researchers, has been used as model. Another aim of the study is examining which direction and magnitude will the affect of pressure groups be on the level of corruption. This effect hasn?t been examining before. Therefore, the number of pressure groups has been included in the analysis conducted. The analysises in the period between 2000-2008 were estimated by least squares method (OLS) using the dynamic and cross-sectional data. According to the results of analysis, there is a negative and statistically significant relation between human development, economic freedom, per capita income and the level of corruption. Accordingly, increasing the level of economic freedom and national income per capita and human development have led to reduced levels of corruption. On the other hand, the influence of pressure group on the level of corruption is positive. Analysis conducted for the years 2007 and 2008, positive and statistically significant effect of pressure groups on the level of corruption has been determined. For this reason, increasing the number of pressure groups causes increasing the level of corruption.