Corruption and economic competitiveness: What Greece can tell us

Abstract

Under the assumption that economic competitiveness has a significant impact on the overall level of corruption in a given country, the present study evaluates the influence that a wide array of national reforms related to the pillars of structural competitiveness has on corruption in the case of Greece. In order to inform national and regional policies against corruption, three indices were calculated that express: (1) the impact of each specific reform on corruption; (2) the required reform effort and (3) the efficiency of the reform index, taking into consideration the competitiveness gap between Greece and Switzerland – the country with the best performance worldwide in terms of competitiveness. These indicators may indicate which reforms have the highest payoff in terms of corruption abatement, which are less costly to undertake and which deliver the greatest reduction in corruption per required effort, respectively. The empirical results of this study suggest that in a number of areas the associated reforms may translate into lower levels of corruption. Under this conceptual framework, institutions seem to be of high importance as they have a substantial impact as far as the reduction of corruption is concerned, with relatively low reform effort. Therefore, a comprehensive policy reform referring to the pillars of structural competitiveness is expected to deliver lower levels of corruption in Greece, allowing the substantial increase of its competitiveness and hence its faster convergence with the more advanced economies in the European Union.