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Abstract. This paper examines the effect of poverty on corruption using annual unbalanced panel data analysis on 154 countries from 2000 to 2013. In the models, we use corruption measures from three alternative sources as a dependent variable while independent variables are five different poverty measures. In addition, this study has some control variables, such as foreign direct investment (FDI), trade openness, inflation rate and democracy level. According to empirical results, all poverty variables and inflation rates have statistically significant and positive effects on corruption, while FDI, trade openness and democracy levels have statistically significant and negative effects. Keywords. Poverty, Corruption, Inflation, FDI, Democracy. JEL. O15, K42, E31, D72.
Ünver et al. (Sun,) studied this question.