This paper will study the relationship between a country’s perceived amount of corruption, and how that affects the wages of its domestic workers. The premise behind this paper is that a country that is perceived as being dishonest and corrupt would have lower wages. Corruption in government is seemingly always present in our world. This paper will try to determine if there is a correlation between a country’s perceived corruption and the monthly disposable income its workers earn with regression analysis. It is this paper’s goal to present empirical evidence and to provide a reason as to why some countries’ wages for workers on average are lower than some of their global counterparts.
One component of the world that has not developed or …show more content…
These countries will reside on either side of the spectra of the corruption index. The Corruption Perceptions Index is a measurement conducted by the Transparency International Organization that gives a ranking of numbers between 1-100 for each country, with a lower number indicating a more perceived corrupt country. In this study, the dependent variable will be the CPI ranking subtracted from 100, thus in our data, the higher the number a country is scored, the more corruption is perceived to take place within its …show more content…
Brima Karl Samura of the Centre for Accountability for Rule of Law offers the opinion that corrupt countries often forego funding of essential departments of their nation, mainly education (Samura 1). This leads to a workforce that is uneducated and less skilled, making them more vulnerable to receiving lesser wages. In an article published by corruptionwatch.org, the author explains how “countless studies around the world show how corruption can interrupt investment… restrict trade” and so on (Corruptionwatch 1). When a country is perceived as corrupt, other nations have a disinclination to trade with them, forcing the corrupt countries to use very cheap labor to compete, hence, minimal wages. The last article discussed in this paper, Dr. Johann Graf Lambsdorff discusses how corruption affects public welfare saying, “industrialists and businessmen are tempted to go in for shady deals instead of steady regular business” (Lambsdorff 4). This unethical acquisition of wealth reduces the businessmen’s incentive to be productive or if they are in a power position at a company, reduces the likelihood they will devote a large interest in the improvement of the workforce, promoting low, stagnant
One component of the world that has not developed or …show more content…
These countries will reside on either side of the spectra of the corruption index. The Corruption Perceptions Index is a measurement conducted by the Transparency International Organization that gives a ranking of numbers between 1-100 for each country, with a lower number indicating a more perceived corrupt country. In this study, the dependent variable will be the CPI ranking subtracted from 100, thus in our data, the higher the number a country is scored, the more corruption is perceived to take place within its …show more content…
Brima Karl Samura of the Centre for Accountability for Rule of Law offers the opinion that corrupt countries often forego funding of essential departments of their nation, mainly education (Samura 1). This leads to a workforce that is uneducated and less skilled, making them more vulnerable to receiving lesser wages. In an article published by corruptionwatch.org, the author explains how “countless studies around the world show how corruption can interrupt investment… restrict trade” and so on (Corruptionwatch 1). When a country is perceived as corrupt, other nations have a disinclination to trade with them, forcing the corrupt countries to use very cheap labor to compete, hence, minimal wages. The last article discussed in this paper, Dr. Johann Graf Lambsdorff discusses how corruption affects public welfare saying, “industrialists and businessmen are tempted to go in for shady deals instead of steady regular business” (Lambsdorff 4). This unethical acquisition of wealth reduces the businessmen’s incentive to be productive or if they are in a power position at a company, reduces the likelihood they will devote a large interest in the improvement of the workforce, promoting low, stagnant