Examining the Moderating Role of Quality of Bureaucracy in the Relationship between Government Size and Corruption in Developing Countries

Corruption is a nasty economic, political, and cultural phenomenon that has many consequences in developed and developing countries. Therefore, the aim of this study is to investigate the moderating role of quality of bureaucracy in the relationship between government size and corruption in developing countries. Using an unbalanced panel data approach, the study examined the impact of government size on corruption in 118 developing countries from 2003 to 2017, given the moderating role of bureaucracy. Moreover, the variables of economic freedom and the percentage of the population under 15 years of age were used as control variables. The results of model estimation showed that the government size has a negative and significant impact on the corruption perception index score, which means that by increasing each unit of the government size, the corruption perception index score decreases  by 0.382. As well, the quality of bureaucracy has a positive and significant impact on corruption perception, which means that by increasing one unit of the quality of bureaucracy, corruption perception index score increases by 0.782. Finally, the quality of bureaucracy, as a moderating variable in the relationship between government size and corruption, has a positive and significant impact. Therefore, in order to reduce corruption in the developing government, the size of the government must be reduced and the quality of the bureaucracy must be improved.