The Impact of Corruption on Budget Deficit in Developing Countries During the Period (2010-2019)

Document Type : Original Article

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Lecturer of Public Finance - Faculty of Commerce - Damanhour University

Abstract

This study aimed to test the impact of corruption on the state budget deficit in developing countries, using a sample of 53 developing countries (13 low-income countries, 23 lower-middle-income countries, and 17 upper-middle-income countries) during the period (2010 - 2019), and first-difference generalized method of moments methodology for panel data. The study concluded that there is a significant positive impact of control of corruption index on the overall and primary budget balance in developing countries. It also found that this result comes from the negative impact of corruption on tax revenues rather than increasing the size of government spending.

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