Corruption Perception Index (CPI) and Macroeconomic Dynamics: Fragile Five Perspective

This study examines the correlation between the corruption perception index (CPI) and economic and social indices in the Fragile Five nations (Brazil, India, Indonesia, Turkey, and South Africa) from 2012 to 2022. The study examines foreign direct investment (FDI), gross domestic product per capita (GDPP), human development index (HDI), income inequality (PALMA), and unemployment rate (UNEMP) as independent factors, with the Corruption Perception Index (CPI) serving as the dependent variable. The analysis, employing the least squares (LS) method and heteroskedasticity-robust standard errors, demonstrates that economic growth (GDPP) and the unemployment rate (UNEMP) exert statistically significant influences on the impression of corruption. Nonetheless, the impacts of social indices like the Human Development Index (HDI) and income inequality (PALMA) are insignificant in the model. The findings suggest that economic growth improves the perception of corruption, but FDI has an unexpectedly negative effect. The positive association of the unemployment rate with the CPI can be explained by structural differences in the labor market and the impact of social perceptions of unemployment. These results, largely consistent with the literature, reveal the multidimensional relationship of corruption perception with economic and social indicators. The study also emphasizes the necessity of strengthening basic principles such as transparency, accountability, and the rule of law in the fight against corruption. An effective anti-corruption policy design will be possible through a holistic approach that simultaneously pursues economic growth and social equality goals. In this context, the findings provide both theoretical and practical guidance for policymakers.