Estimating the impact of corruption perception index on inflation rate Case study: MENA Region Countries

Given that inflation has always been known as an economic problem that that imposes many costs on society, recognizing the most effective factors on it is very important. The aim of this study is to examine the effect of administrative corruption on inflation rate in the countries of the Middle East and North Africa during 2003-2010. For this purpose, corruption perception Index has been used to measure administrative corruption in these countries. In this study, the effect of Corruption Perception Index on inflation rate has been determined using the approach of panel data along with other control variables such as equity growth rate, economic openness, per capita income, and final consumption expenditure. The results imply that the corruption perception index, degrees of economic openness, and per capita income variables have a negative significant effect on inflation rate. Furthermore, equity growth rate and final consumption expenditure variables have positive effects on inflation rate. Thus, the most important recommendation of this study is that economic experts of these countries reduce administrative corruption with the use of appropriate policies and reduce inflation rate through increasing the production rate, per capita income, and economic growth reinforcement.