The Effects of Corruption on Government Expenditures: Arab Countries Experience

Abstract

Corruption is popularly defined as the abuse of public power for private gains. Corruption as a phenomenon , is a global problem and exist in varying degrees in different countries.

Corruption poses a serious development challenge, it has a number of adverse consequences on domestic investment, on foreign direct investment, on economic growth, on the size and composition of government expenditure.

The purpose of this paper is to briefly review the literature in order to discuss what the latter suggests about the relationship between corruption and the composition of government expenditure (education and health government expenditures) and to investigate empirically( using simple regression model) this relation for the case of Arab countries.

We found that corruption reduces education and health spending as part of total public spending.

Keywords: corruption, Government expenditures, Arab countries