The Effect of Corruption on Economic Growth: the Case of Algeria. For the Period 1990-2015

Abstract

This study investigates the impact of corruption on economic growth in Algeria over the period 1990-2015 by using economicfreedom index and World Bank indicators. The (OLS) regression test has beenapplied in order to examine the effect of the five macroeconomic variables on economic growth, such as economic freedom index (EFI), oil prices (OP), Population Growth (PG), foreign direct investment (FDI). By using this approach, all variables are statistically significant and have a positive effect on the dependent variable, except (EFI), it adversely affects it. These results support the view that corruption sands the wheels of economic growth. Thus, the Algerian government should root out this scourge by finding the relevant solutions that must be supported with effective weapons such as transparency and tougher accountability standards.