The connection between control of corruption and economic growth in the new and old European Union member states

This paper analyzes the control of corruption–economic growth nexus in the EU in the period 1996–2022. Using panel data models, the analysis reveals divergent effects across the continent. In Old EU member states, control of corruption positively influenced economic growth, while in the New EU member states, it surprisingly had the opposite effect, reducing growth. Economic growth, however, consistently enhanced corruption control in both groups of countries. The findings also reveal that a larger urban population correlated with less control of corruption and harmed growth because of inefficient resource allocation. Bidirectional causality between corruption and GDP per capita is supported for the entire EU and specifically in the New member states, while in the Old EU, the causality runs only from economic growth to corruption. These empirical results provide a crucial starting point for tailored policy proposals to mitigate corruption and promote sustainable growth across the EU.