DETERMINANTS OF ECONOMIC CORRUPTION: A CROSS-COUNTRY DATA ANALYSIS
A.Yılmaz ATA, Dr. M. Akif ARVAS

Abstract
Corruption, which is described as the use of public power for individual purposes is a complex concept. Since corruption’s roots are grounded in a country’s economic, political, legal, social and cultural structure, it threatens security, damages trust and public confidence in systems which affect people’s daily lives. The aim of this paper is to empirically test a model that links economic factors such as economic development and growth, inflation, economic freedom and income distribution to corruption in a cross-section of 25 Europe countries in the average of 2004-2007 years. The empirical findings of this paper suggest that economic development, inflation, economic freedom and income distribution are found statistically significant determinants of corruption. In this respect, in periods of economic booming as GDP per capita rises, corruption declines. On the contrary in periods of high inflation and skew income distribution, corruption rises. However, in this study, economic growth is found statistically insignificant determinant of corruption.

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