Nexus between Governance, Corruption and Economic Growth: Learning from MENA Region

Corruption is widely recognized as a pervasive issue that impacts countries globally, affecting economies in varying degrees and at different levels of intensity. It impedes economic growth, distorts market efficiency, and fosters inequality. Corruption is evident even in societies perceived as having minimal corruption, often manifesting through bribery, embezzlement, and preferential treatment. Numerous studies confirm the adverse effects of corruption on economic development, with wealthier countries generally reporting lower corruption levels compared to poorer nations. However, it remains uncertain if rising incomes consistently reduce corruption across different socioeconomic and political contexts. In the MENA (Middle East and North Africa) region, corruption intersects with several factors such as resource wealth, governance frameworks, and economic freedom, highlighting a complex relationship between economic progress and institutional integrity. This study revisits the corruption-growth nexus, examining empirical data from 2004 to 2024 and exploring key determinants like youth unemployment, ethnic diversity, and political freedom. We analyze how internal and external controls, such as judicial efficiency, public sector wage structures, and transparency, contribute to or mitigate corruption. Findings indicate that countries with abundant resources often experience high levels of corruption, while economic freedom and robust governance frameworks can curb corrupt practices, underscoring the importance of comprehensive anti-corruption reforms.