The Shock of Corruption on GDP Per Capita: A Panel Data Postmortem on the South Asian Region

Corruption is characterized as the exploitation of entrusted authority forpersonal advantage, often taking the form of illegal acts, deceit, or bribery,and is broadly regarded as harmful to economic progress. Although someresearch indicates that corruption might enhance certain economicactivities, it is primarily perceived as a major obstacle to sustainabledevelopment on a global scale. The research question of this study is:What is the effect of corruption on GDP per capita in South Asiannations between 1995 and 2016? This investigation examines the linkbetween corruption, as assessed by the Corruption Perception Index(CPI), and GDP per capita in South Asia. By employing a GeneralizedLeast Squares (GLS) model, the study seeks to analyze the impact ofcorruption on GDP per capita. The results reveal a significant negativeassociation between corruption and GDP per capita, indicating thatcorruption hinders economic growth in the region. Therefore, it is crucialfor the governments of these nations to adopt effective strategies toaddress corruption and foster sustainable economic development.