The Measuring Economic Cost of Corruption: Empirical Evidence from Pakistan

Purpose- In this study economic cost of corruption in Pakistan has been measured. Pakistan has been facing the problem of corruption since its independency. According to transparency international United states of America Pakistan has been ranked 117 countries out of 180 in world in 2017. Method/Design- Secondary data has been collected from various sources such as Asian development bank and various issues of economic survey of Pakistan. In this study independent variable such as export, inflation and foreign borrowing impact on dependent variable corruption perception index has been analyzed.in this analysis OLS regression technique was applied in e-view 7. Findings- Foreign borrowing and export annual change is found to have significant impact on corruption but there is no significant impact of inflation on corruption perception index. Based on finding it is recommended that policy makers should develop effective policies in order to reduce the impact of corruption on economy.