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Abstract:
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Corruption, defined as the abuse of public power for private benefit, is one of the main problems faced by developing countries. Corruption tends to dampen economic progress and trigger economic inequality. In an effort to prevent those detrimental effects, many countries spend considerable amount of resources to eradicate corruption. However, this effort tends to fail, mainly due to the lack of understanding on factors affecting corruption and the lack of political will. This thesis studies the relationship between ten independent variables economic openness, ratio between public budget and total GDP, quality of democracy, press freedom, ratio between export from natural resources and total export, proportion of people who live in urban area, political stability, quality of regulation and economic freedom and control of corruption. I use fixed effects method with time dummies and country dummies to understand the time specific as well as country specific effects, effecting control of corruption. Due to the extensive data, the unique independent variables and methodology, this thesis moves beyond the previous studies concerning corruption and enables me to draw few unique conclussions relevant for the decision makers who intend to eradicate corruption. |