1. ¹The Centre for Euro-Asian Studies, The University of Reading, Whiteknights, PO Box 218, Reading RG6 6AA, UK. E-mail: y.kaluyzhnova@reading.ac.uk
2. ²Department of Economics and Finance, Southern Illinois University, Edwardsville, Il 62026-1102, USA. E-mail: akutan@siue.edu
3. ³Department of Economics, Bilkent University, Ankara, Turkey. E-mail: tyigit@bilkent.edu.tr

Abstract

We empirically model the causes of corruption and test the economic development–corruption link in energy-rich economies, using data from 48 countries with energy resources. The results indicate that energy abundance may not necessarily hurt economic development in energy-rich countries, allowing enterprises to conduct business more effectively to reduce corruption, establishing a better political (democratic) regime improves corruption rankings, and finally while corruption reduces both the level of GDP per capita and its growth rate, economic development decreases corruption.