Empirical Assessment of the Impact of Corruption and Public Spending on Sustainable Development: Evidence from Method of Moments Quantile Regression

This study aims to examine the impact of corruption and public spending on sustainable development. We use data from 38 developing countries for the period 2000-2022, employing the method of moments quantile regression (MMQR) estimation recently developed by Machado and Santos Silva (2019), and test robustness with S-GMM. Research results show that corruption has a major impact on sustainable development at all levels, indicating that corruption hinders efforts to achieve sustainability in developing countries. Interestingly, we find public spending to have an asymmetric impact on sustainable development: a negative impact is found at low quantiles, but the impact becomes positive at high quantiles as management efficiency increases. From the research results, we propose some policy implications to control corruption and increase the efficiency of public spending to promote sustainable development in developing countries.