Analyzing the Impact of Governance on Corruption Perception A Global Perspective

Abstract

This study investigates the impact of governance on corruption perception scores from a global perspective, utilizing 12 years of panel data (2012–2023) on perceived corruption from Transparency International and governance indicators from the World Bank. An explanatory research design was adopted, and data analysis was performed using EViews statistical software. To ensure robustness, multicollinearity was assessed using the Variance Inflation Factor (VIF), leading to the exclusion of political stability and voice and accountability due to high correlation with other variables. Ordinary Least Squares (OLS), random effects, and fixed effects models were compared using the Breusch-Pagan Lagrange Multiplier and Hausman tests, which identified the fixed effects model as the most suitable. The analysis revealed that control of corruption, regulatory quality, and rule of law have a statistically significant influence on corruption perception scores, while government effectiveness showed an insignificant impact. The findings underscore the critical role of specific governance dimensions in shaping corruption perception scores. As a policy implication, governments should prioritize strengthening institutions that enhance regulatory quality, uphold the rule of law, and effectively control corruption. It is recommended that international development strategies integrate these governance aspects to foster transparency and accountability in both public and private sectors globally.