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Complications Of Government Corruption

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Introduction: If we read the News today, we could see that the government all over the world is corrupt. According to US Legal, government corruption is when government leaders abuse their political power to extract and accumulate for private enrichment (US Legal, Inc.)[1]. Technically, this is a bad thing because when government leaders use their power for their benefit, it does not necessarily mean that it is beneficial to the public and the society. To prove or disprove this argument, I decided to run an econometric analysis to see whether government corruption hinders or helps economic development. Method: There were three datasets I used for this paper. The first and the main dataset was the dataset that contained the data on government corruption, which came from the "Worldwide Governance Indicators" excel file posted on World Bank. From this dataset, I pulled out one important variable called "Corruption," which is a measure of the government performance. It ranges from -2.5 (bad government performance/corrupted) to 2.5(good government performance/not corrupted). We need to be careful when interpreting this variable because even though this is a “corruption measure,” higher positive value actually means the government is doing better and less corrupted. The second dataset I used was Penn World Table version 9.0[3]. From this dataset, I pulled out the variables: average hours worked (avh), human capital index, based on years of schooling and returns to education

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