Between freedom and corruption: the interplay of total reserves during the COVID-19 epoch – a cross-country inquiry

Abstract

Purpose

This study examines the function of total reserves in light of the relationship between the economic freedom index and the corruption perception index during the COVID-19 period over countries.

Design/methodology/approach

This analysis encompasses a sample of 102 nations, spanning the time period from 2020 to 2021, and draws data from several sources. By employing a random effects model, we are able to adequately address the potential influence of year-specific factors, including the effects of COVID-19, as well as country-specific disparities. This approach allows for a comprehensive examination of our primary variables, assuring a nuanced study.

Findings

The findings indicate that when economic freedom and reserves are examined separately, they tend to promote corruption. However, when these factors are studied together, they have a complementary effect in reducing corruption. The impact of the COVID-19 period further confirms the relationship, highlighting its substantial influence on the interplay between economic freedom, reserves, and corruption.

Research limitations/implications

The time frame spanning just two years and the sample limited to 102 nations may affect the generalizability of the findings. Therefore, there is a clear need for additional research to facilitate more comprehensive generalizations.

Originality/value

This study is notable for its distinctive examination of the function of Total Reserves in light of the association between the economic freedom index and the corruption perception index. Within the framework of the challenging COVID-19 era, this investigation offers novel perspectives on the intricate dynamics among economic freedom, reserves, and corruption perceptions.