Pakistan Institute of Development Economics



Corruption, Political Stability and Economic Growth

This paper gives insight of the role of political stability ininvestigating the two competing hypotheses in Developing Eight Muslimcountries, and also investigates whether conditional liaison betweencorruption and political stability matters or not. The empiricalfindings indicate that investment, population and political stabilityplay positive role in promoting economic growth. Corruption not onlyimpact growth but also influenced by the institutional quality that anation experiences. Corruption acts as sands in the wheels in thenations having higher degree of political stability, and greases thewheels in less politically stable countries such as Nigeria andPakistan. Thus, political stability is conducive to growth, as itreduces the social unrests, political turmoil, and encouragesinvestment, and there by economic growth. JEL Classification: C30, D73,O43, P48 Keywords: Corruption, Economic Growth, Political Stability,Conditional Cooperation

Ghulam Shabbir,

Mumtaz Anwar,

Shahid Adil