A Study on the Relationship Between Democracy and Corruption in Mena Countries by Using DGMM Model

Abstract

The purpose of this study is to investigate the relationship between democracy and corruption using a Dynamic Generalized Method of Moments (DGMM) during the period 1984-2013 for 13 MENA countries, namely Algeria, Bahrain, Egypt, Iraq, Iran, Kuwait, Lebanon, Morocco, Qatar, Saudi Arabia, Tunisia, Turkey and United Arab Emirates.Our results captured the GDP per capita as the  feeding corruption factor in MENA countries in a way that a rise of one percent of per capita GDP leads  corruption to rise by about 0.73 particularly in MENA net oil and gas exporting countries except for United Arab Emirates (See Omgba (2015); Haber and Menaldo (2011). In this context, the richest oil exporting countries have not been able to decrease their corruption level, (See Jetter (2015), Rachdi and Saidi (2014). Conversely, the magnitude of impact for non-oil producing countries happen to be less related to corruption over the last decade compared to the two early decades. Finally, our findings present a positive and a significant association between democracy and corruption; the influence of positive feedback is around 0.5 points. According to this estimation, lower democratization process in MENA countries is highly influenced by high levels of corruption.

Keywords: Corruption, Democracy, MENA Countries, Panel GMM

GEL Classification: D73, K42, P16