Thesis (Ph.D.) - Cairo University - Faculty of Economics and Political Scienc - Department of Economics

This study empirically examines whether corruption represents a significant channel through which the impact of two main constitutional rules (electoral rules and form of government) on economic growth is likely to be transmitted or not. In addition, it tries to estimate the direct and total impacts of these rules on growth. This was done first by deriving theoretical hypotheses and possible scenarios concerning these effects before testing them empirically. The study employed OLS and 3SLS estimation on a system of two equations, where both corruption and GDP growth are determined jointly by a set of control variables and constitutional rules. In addition, a general framework for mediation analysis was employed to estimate the direct, indirect and total effects of these constitutional rules. Using panel data for a sample of 113 democratic countries over the period (1995 - 2012), the results suggest that, on one hand, the effect of form of government on growth is a direct one, with presidentialism being more conducive to economic growth compared to parliamentarism. On the other hand, results show that plurality electoral rules are accompanied by higher growth rates compared to PR - only indirectly through lowering the level of corruption. Also, data showed very weak evidence that mixed electoral rules are accompanied by higher growth rates. Moreover, the findings of this study supported the negative effect of corruption on growth

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