Abstract

This study examines the relationship between corruption and income inequality using a panel data analysis across multiple countries and time periods. A fixed effects regression model is employed to account for unobserved country-specific factors that may influence inequality. The analysis draws on the Corruption Perceptions Index (CPI) as the primary measure of corruption. The findings show a positive relationship between corruption and income inequality, implying that corruption distorts resource allocation, restricts access to public goods, and exacerbates economic disparities. Notably, unemployment emerges as a significant component, possibly fostering corrupt behaviors as based on the agency theory. With various existing literature examining the nature between corruption and income inequality in differing regions all with similar reasoning and findings although not with fundamental theoretical framework. Furthermore, the findings add to the greater discussion on governance and economic development, emphasizing the importance of anti-corruption policies in reducing inequality.

Advisor

Krause, Brooke

Department

Economics

Publication Date

2025

Degree Granted

Bachelor of Arts

Document Type

Senior Independent Study Thesis

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