Investigating the Relationship between Public Governance and the Corruption Perception Index

Abstract

This study aims to investigate the relationship between public governance and the Corruption Perception Index (CPI) while also examining the impact of national income per capita on this association. This study covers a decade-long period from 2012 to 2021 and involves 180 countries from various regions, including America, Asia Pacific, Middle East and North Africa (MENA), Sub-Saharan Africa, Europe Central Asia, and Western Europe. To analyze the extensive dataset, which comprises 1768 data points, the study used the Generalized Estimating Equations (GEE) method. The research findings suggest that all aspects of public governance, such as voice and accountability, political stability, government effectiveness, regulatory quality, the rule of law, and control of corruption, significantly influence the perception of corruption. This indicates that good governance practices can effectively reduce corruption. Interestingly, the impact of income per capita is not uniform across all dimensions of governance and the CPI. Instead, the study reveals that stricter rule of law and anti-corruption measures are more influential in wealthier nations, highlighting the importance of proper resources and infrastructure in eradicating corrupt practices. These insights are particularly valuable for policymakers, government officials, and international organizations involved in promoting good governance and fighting corruption. The results of this study can be used to formulate effective policies and strategies for strengthening governance practices, reducing corruption, and ensuring a fair and just society.

Keywords:

• Public governance
• corruption perception index
• generalized estimating equations
• income per capita

Reviewing Editor:

• Heng Choon (Oliver) Chan, Department of Social Policy, Sociology, and Criminology, University of Birmingham, Birmingham, UK

SUBJECTS:

• Business, Management and Accounting
• Government & Non-Profit Accounting
• Corporate Governance

1. Introduction

Corruption is a persistent and widespread problem that has stained the face of human society (Alatas, 2015). Its negative impact can be observed in many spheres, including cultural, economic, and political landscapes. Corruption can take various forms, such as the offer or acceptance of bribes, embezzlement of funds, nepotism, or cronyism (Kingsly, 2015; Shah et al., 2023). This pervasive problem caused by corruption ultimately weakens the social fabric and undermines the prospects of nations, often leading to a breakdown of trust in institutions and the erosion of public confidence (Ceschel et al., 2022; Dhillon & Nicolò, 2023). Corruption, which refers to the misuse of power for personal gain, has a detrimental impact on society (Ceschel et al., 2022; Salihu, 2022). The pervasive presence of corruption in society poses a serious threat to economic growth and development (Trabelsi, 2024). Furthermore, corruption undermines the trust that people have in their public institutions and erodes the legitimacy of the government in the eyes of its citizens (Peerthum & Luckho, 2021; Tu, 2023). When public officials prioritize their own interests over those of the public, it leads to the breakdown of social and economic systems, ultimately affecting the well-being of the entire community (Mauro, 1995; Tanzi, 1998). The detrimental impact of corruption cannot be overlooked; therefore, it is imperative to conduct a thorough investigation into its root causes. Furthermore, it is crucial to identify viable solutions to prevent corruption to avoid severe repercussions that may arise as a result of its occurrence.

The concept of public governance has received significant attention in academic discourse as governing in an increasingly interconnected world has become more complex for researchers, policymakers, and practitioners. Public governance involves managing public resources and formulating policies that affect how the government interacts with society (Bovaird & Löffler, 2015; Löffler, 2015; Osborne, 2006). The proper implementation of key components of public governance, such as transparency, accountability, and citizen participation, can act as powerful deterrents against corrupt practices. By ensuring that decision-making processes are open and accessible to all, holding individuals and institutions accountable for their actions, and actively engaging citizens in the decision-making process, we can create a culture of integrity and trust that prevents corruption from taking root and spreading (Devas & Grant, 2003). Effective public governance plays a vital role in promoting social welfare and sustainable development, encouraging citizens to participate in public decision-making actively, and enhancing the strength of institutions (Barnes et al., 2004; Handoyo & Fitriyah, 2018; Jäntti et al., 2023; Yang et al., 2019). In contrast, poor governance, characterized by weak or absent oversight mechanisms, can create an environment in which corruption thrives and goes unchecked (Ceschel et al., 2022; Farazmand et al., 2022).

Public governance refers to various mechanisms, cultural norms, and institutional structures that shape power within a nation. It encompasses a range of activities and practices, including policymaking, regulation, public service delivery, and management of public resources (Handoyo, 2023). The importance of effective governance practices in reducing corruption is well documented. Better governance can lead to a more transparent and accountable public sector, whereas weak governance can undermine public trust and harm societal well-being. Multiple studies have suggested that countries with better governance practices have lower corruption levels (Doig et al., 2005; Gaventa & McGee, 2013; Rose-Ackerman, 1999). This correlation is supported by Kaufmann et al. (2011), those who propose that effective governance practices are inversely related to corruption levels. However, the complex interplay between governance and corruption underscores the need for a careful examination of governance structures and their impact on corruption levels.

Scholars and policymakers have identified the need for governance models that prioritize transparency, accountability, and legal integrity in the battle against corruption (Ceschel et al., 2022; Grundy et al., 2022; Salleh & Matsham Heidecke, 2019). These practices entail making government activities open and accessible to the public, holding public officials accountable for their actions, and ensuring that all legal procedures and regulations are followed. By implementing such practices, there is a greater chance of creating a public sector that operates with more transparency and responsibility, which in turn reduces opportunities for corrupt practices to flourish. Grindle (2007) argues that emphasizing these values in governance models is a promising approach to addressing corruption. Despite the promise of governance models that prioritize transparency, accountability, legality, and integrity, a more in-depth understanding of their intricacies is necessary. To achieve this, it is crucial to delve into specific governance practices that have proven most effective in reducing corruption. Additionally, it is important to consider contextual factors that may impact the success of these practices, such as cultural, political, and economic influences. By conducting further research on these topics, we can gain a more comprehensive understanding of how public governance models and country-specific factors can reduce corrupt practices.

The Corruption Perception Index (CPI) is a highly regarded tool that provides rankings of countries according to perceived levels of corruption in the public sector (Alfaro, 2022). This index was developed by Transparency International, a global organization that aims to promote transparency, accountability, and integrity in public institutions (Puiu, 2023). The CPI is an essential tool for policymakers, researchers, and activists who seek to understand the state of corruption worldwide and work towards creating more transparent and accountable systems of governance (Alfaro, 2022; Puiu, 2023). As a widely recognized measure, the CPI offers unique insights into state and corruption trends across countries (Lambsdorff, 2007a). The CPI is based on the opinions of experts and businesspeople and provides valuable insights into the state of public-sector corruption (Alfaro, 2022). To fully understand the nuances of corruption in various countries and how they relate to the actual state of public governance, it is imperative to delve deeper than mere surface-level observations. To obtain a comprehensive understanding of the intricate relationship between CPI scores and the prevalence of corruption, it is crucial to conduct an in-depth analysis that takes into account various factors and variables. This approach allows us to gain a more accurate and detailed insight into the subject matter.

The relationship between public governance and corruption has been a captivating topic for many scholars and researchers (Di Pietra & Melis, 2016; Monteduro et al., 2016; Salihu, 2022). One school of thought proposes that a country's per capita income can substantially impact the prevalence of corruption within that country. As income levels increase, individuals may feel less compelled and motivated to engage in corrupt practices, resulting in a reduction in their overall level of corruption. This suggests a link between a country's economic prosperity and its ability to maintain a transparent and fair public governance system (Gyimah-Brempong, 2002; Hall et al., 2020; Treisman, 2007). It is essential to understand that the commonly held notion that higher income levels lead to lower levels of corruption is not always true. Several countries with high levels of economic prosperity have a lower Corruption Perception Index (CPI), indicating that the relationship between income and corruption may be more complicated than initially thought. This observation suggests that there could be an inverse correlation between income and corruption, whereby a decline in corruption levels may lead to an increase in income levels (Paldam, 2002). These discoveries bring to light the intricate and multifaceted interplay between a country's income and the level of corruption. They suggest that, while income may play a role in influencing corruption rates, other factors, such as political and cultural dynamics, can equally contribute. Therefore, it is imperative to conduct further studies to verify the credibility and relevance of the existing research gap in comprehending the complex nature of corruption in different countries.

In the past few years, there has been a growing interest in understanding the relationship between public governance and the perception of corruption. This interest has resulted in extensive research in both academic and practical spheres. However, despite the abundance of research on governance and corruption, there is still a significant gap in our understanding of how these two elements are connected. To address this gap, this study seeks to conduct a comprehensive analysis of how the quality of public governance influences perceptions of corruption. By exploring this connection, this research aims to provide unique and valuable insights into the fields of business, management, and accounting. The findings of this study could have significant implications for policymakers, organizations, and society as a whole in terms of improving public governance and reducing corruption.

This investigation is highly relevant due to the recognition that corruption is a significant obstacle to economic growth, political stability, and good governance. While previous research has made some progress in understanding the causes and effects of corruption, there has been relatively little focus on the specific impact of governance practices on the national level in association with the corruption perception index. This lack of attention is particularly significant in the context of the increasing emphasis on transparency, accountability, and efficiency in public administration as strategies for tackling corruption. Therefore, this investigation aims to shed light on the relationship between public governance practices and corruption perception and contribute to the ongoing efforts to combat corruption and promote good governance on the national level.

Distinctively, this study employs a longitudinal data panel, leveraging a multi-dimensional analysis that encompasses various governance indicators to assess their collective and individual impact on the Corruption Perception Index. By utilizing an extensive dataset, the study provides a robust investigation of the dynamic interplay between governance and corruption over time. Additionally, the study investigates how national income per capita moderates these relationships, providing valuable insights into the interaction between economic factors and governance in influencing corruption perceptions. By doing so, it not only enriches the existing literature with empirical evidence but also sheds light on the complex mechanisms through which governance practices influence corruption perception. Furthermore, the research introduces a novel conceptual framework that integrates theoretical perspectives from the fields of public administration, political science, economics, and business ethics, offering a holistic understanding of the governance-corruption nexus.

This study is significant in three primary ways. Firstly, it provides valuable insights into the relationship between public governance and corruption perception, which is a relatively underexplored area in the literature. The study's empirical findings help to shed light on how public governance practices can influence perceptions of corruption. Secondly, the study introduces a comprehensive analytical model that can serve as a foundation for future research endeavors exploring similar themes. This model's development is a significant contribution to the literature, as it provides a framework to guide future research studies. Lastly, the research identifies the specific governance practices that have a substantial impact on corruption perception. By doing so, it offers practical implications for policymakers and public administrators seeking to devise effective anti-corruption strategies. The study's findings provide valuable guidance on which governance practices are most effective in reducing corruption perception and provide insights into how these practices can be implemented in practice.

This research provides a novel perspective on a pressing issue that has far-reaching implications for societies worldwide. It offers a valuable contribution to academic discourse, shedding new light on the challenges of establishing transparent, accountable, and effective governance systems across the globe. The study is expected to generate significant interest among a diverse range of readers, including academicians, researchers, practitioners, and policymakers. Its primary objective is to foster a deeper understanding of the intricate relationship between public governance and the perception of corruption and to advance the development of evidence-based policy solutions to tackle this complex problem.

2. Theoretical and conceptual framework

2.1. Principal agent theory

The Principal-Agent Theory is a valuable framework for analyzing corruption within public governance, especially as it relates to the Corruption Perception Index. This theory primarily addresses the complexities inherent in relationships where one party (the principal) delegates responsibilities to another (the agent), particularly in the context of public administration. In this case, citizens and their elected representatives act as principals, while public officials and bureaucrats serve as agents. The theory originated from the seminal work of Jensen and Meckling (1976), emphasizing the challenges of information asymmetry, where agents possess more information than principals, which can lead to a misalignment of interests. These discrepancies can create an environment conducive to corruption, as agents may prioritize personal gains over public welfare and engage in activities such as bribery, embezzlement, and fraud (Ceschel et al., 2022; Martinsson, 2021).

The Principal-Agent Theory is not only helpful in understanding public sector corruption but also provides practical mechanisms for mitigating it. The strategies that stem from this theory are aimed at realigning the interests of agents with those of principals, enhancing transparency, and reducing information asymmetries. For example, increasing transparency in governmental processes and financial transactions can significantly reduce corrupt practices by bridging the information gap between public officials and citizens (Ceschel et al., 2022; Farazmand et al., 2022). Additionally, establishing robust oversight mechanisms such as independent anti-corruption bodies and audit institutions can enforce accountability and deter corrupt behavior (Heinrich & Brown, 2017). These measures can help to reduce public sector corruption.

Effective public governance can play a vital role in reducing corruption by creating incentive structures that are in line with the interests of the public (Handoyo & Fitriyah, 2018; Martinsson, 2021; Zhang, 2018). This can be accomplished by offering rewards based on performance, promoting career advancements based on merit, and enforcing strict penalties for those who engage in misconduct. In addition to this, it is essential to create an atmosphere of integrity within public institutions. This involves implementing formal rules and regulations while also promoting informal norms and values that discourage corrupt behavior. By fostering an environment where ethical behavior is highly valued and encouraged, corruption can be effectively mitigated (Feldman, 2017; Hauser, 2019; Manara et al., 2020).

2.2. Institutional theory

Institutional Theory provides a comprehensive framework for analyzing the intricate relationship between public governance and the Corruption Perception Index, emphasizing the critical role that institutions, whether formal or informal, play in shaping corruption (Melgar et al., 2010; Pillay, 2014; Xiao et al., 2020). According to this theory, the strength, transparency, and accountability of institutions are crucial factors that determine the extent to which corruption is prevalent within a society (Hapuhennedige et al., 2020). Institutions form the foundation upon which economic and political interactions are built, it becomes evident that the integrity and effectiveness of these institutions are directly tied to corruption levels (Aidt, 2003; Campos & Giovannoni, 2017; Fjelde & Hegre, 2014). Weak institutions, which are characterized by inadequate enforcement of laws, opacity, and a lack of accountability mechanisms, provide an environment in which corrupt practices may flourish (Azoro et al., 2021; Farazmand et al., 2022). On the other hand, strong institutions with robust legal frameworks, transparent operations, and effective oversight can significantly reduce opportunities for corruption (Asaduzzaman & Virtanen, 2021; Handoyo & Fitriyah, 2018).

The theory emphasizes the crucial role played by informal institutions such as societal norms, values, and culture, in shaping the behavior of individuals and organizations with regards to corruption (Pena López & Sánchez Santos, 2014). It suggests that in societies where corruption is widespread or expected, formal anti-corruption measures may struggle to make a significant impact. Therefore, it is essential to adopt a two-pronged approach to combat corruption that addresses both the formal structures of governance and the informal cultural norms that influence societal behavior (Tu, 2023; Westerwinter et al., 2021). By doing so, it is possible to create a culture of integrity that discourages corrupt practices and promotes transparency in all spheres of society. This approach recognizes the importance of cultural context and the impact of social norms on individual and group behavior and seeks to leverage these factors in the fight against corruption.

Strategies aimed at addressing corruption based on institutional theory provide a diverse range of interventions. One of the most effective interventions is the creation and enforcement of strict legal frameworks that clearly outline corrupt activities and the appropriate penalties for such actions (Martinsson, 2021; Pillay, 2014). This creates a strong disincentive against corrupt activities. In addition, promoting transparency and accountability in public administration through initiatives such as open government and financial disclosures by public officials can significantly reduce the opacity that often enables corrupt activities (Cuadrado-Ballesteros et al., 2023; Erkkilä, 2020). By implementing these interventions, we can combat corruption and promote a culture of accountability and fairness in public institutions (Brenya Bonsu et al., 2023; Min, 2019)

To effectively tackle corruption, it is essential to have formal mechanisms in place. However, promoting public participation in governance processes and empowering civil society can also be helpful. Civil society organizations can act as watchdogs, monitoring public institutions and advocating for greater accountability and integrity (Gray et al., 2006; Grimes, 2013; Williamson et al., 2022). By building a culture that rejects corruption, we can ensure its sustainable eradication. Creating this culture requires a shift in societal attitudes toward corruption, which can be done through educational reforms, public awareness campaigns, and the cultivation of ethical leadership (Ceschel et al., 2022; Pozsgai-Alvarez, 2022). By doing so, we can create a society that values transparency, accountability, and integrity and is committed to fighting corruption.

2.3. Public choice theory

Public Choice Theory provides a nuanced understanding of the relationship between public governance and the Corruption Perception Index by conceptualizing politicians and bureaucrats as rational, self-interested actors similar to participants in economic markets (Dell'Anno, 2020; Melgar et al., 2010; Mungiu-Pippidi & Dadašov, 2016). This theory is based on the economic analysis of political decision-making and explains how the incentives within public institutions can lead to corrupt behavior. The theory suggests that when there are not enough checks, balances, and competitive pressures, government officials may exploit their power for personal gain, which can result in practices such as rent-seeking, policy manipulation, and outright corruption (Campos & Giovannoni, 2017; Etzioni‐Halevy, 1989).

Public Choice Theory highlights the significance of aligning the interests of public officials with the broader public good by strategically structuring incentives and institutional arrangements (Brunjes, 2019). To achieve this alignment, it is essential to reinforce institutional checks and balances to prevent the concentration of power, ensuring accountability across different branches of government and independent bodies (Alemanno & Spina, 2014; Holcombe, 2018). The dispersion of power acts as a safeguard against the abuse of authority and facilitates mechanisms to hold public officials accountable (Edwards & Hupe, 2012; Emerson et al., 2011).

Furthermore, according to the theory, promoting political competition can act as a strong deterrent against corrupt practices (Campos & Giovannoni, 2017; Perlman & Sykes, 2018). This is because when there is a competitive political environment, politicians are more likely to refrain from engaging in corrupt activities due to the increased risk of losing support from the electorate (Dincer & Johnston, 2016). The presence of viable alternatives for the electorate makes it more costly for politicians to engage in corrupt practices. This competitive dynamic also enhances the accountability of public officials, as they are aware of the consequences of being caught engaging in corrupt activities. Fostering a competitive political environment is a critical step in reducing corruption and improving accountability among public officials.

Public Choice Theory is a framework that emphasizes the essential role of citizen engagement and oversight in preventing corrupt practices (Campos & Giovannoni, 2017). This theory suggests that citizens must be actively involved in the political process and that civil society organizations and media must operate with constant vigilance to safeguard against corruption (Ceschel et al., 2022; Görtz, 2022). This perspective uses the power of organized public oversight in exposing and deterring corruption (Lyra et al., 2022). Thus, when the populace is empowered to participate in the political process and has access to information, it becomes easier to hold public officials accountable and prevent corruption from taking root (Bobbio, 2018; Park et al., 2022; Verdenicci & Hough, 2015).

2.4. Public governance

Public governance refers to the various structures, systems, and institutions that are in place to enable societies to effectively manage their affairs, allocate resources, and coordinate their actions manner (Rhodes & Osborne, 2002; Rhodes, 1996). This includes decision-making processes, administrative procedures, regulatory frameworks, and other mechanisms that are designed to promote transparency, accountability, and fairness in the way that public resources are used and managed. Public governance represents the traditions, institutions, and processes that determine how power is exercised, how stakeholders have their say, how decisions are made, and how citizens and other groups are involved in the decision-making processes (Kooiman, 1999, 2003). Effective public governance is essential for ensuring the well-being and prosperity of a society, as it enables individuals and organizations to work together towards common goals and to address shared challenges in a collaborative and constructive. It reflects a shift from traditional bureaucratic modes of governance to more complex, multi-actor networks of governance (Kooiman, 1993). Osborne (2006) highlights the rise of the 'New Public Governance' (NPG) paradigm, which is characterized by a focus on governance beyond the state, including collaborations, partnerships, and networks. This move towards NPG underscores the need to understand governance as the product of interactions between public, private, and third-sector organizations. Moreover, NPG emphasizes the role of citizens and stakeholders in shaping governance outcomes and fostering accountability (Skelcher & Torfing, 2010).

The well-known public governance developed by the World Bank is Worldwide Governance Indicators (WGI). The Worldwide Governance Indicators (WGI) project represents a comprehensive effort to quantify the quality of governance across over 200 countries. Developed by the World Bank Development Research Group, led by Daniel Kaufmann, Aart Kraay, and Massimo Mastruzzi (Kaufmann et al., 2011). This initiative focuses on six broad dimensions of governance, offering a multi-faceted view of governance quality that is essential for both research and policy-making (World-Bank, 2024). The World Bank identifies six dimensions of public governance namely voice and accountability, political stability, government effectiveness, regulatory quality, rule of law, and control of corruption (World-Bank, 2024). These indicators are based on data from more sources produced by various institutions, including survey institutes, think tanks, NGOs, international organizations, and private sector firms (World-Bank, 2024). Since 1996, the WGI have offered annual updates, making it one of the most extensive datasets on governance. This dataset is invaluable for a wide range of stakeholders, including international organizations, government bodies, the private sector, NGOs, and academia, who use it to analyze governance issues and develop policies aimed at enhancing governance and development outcomes.

The first dimension, Voice and Accountability, reflects the extent of citizens' participation in government selection, along with the freedoms of expression, association, and the press (Kaufmann et al., 2011; World-Bank, 2024). The Political Stability and Absence of Violence/Terrorism dimension evaluates countries' susceptibility to political instability and violence, including terrorism (Kaufmann et al., 2011; World-Bank, 2024). Government Effectiveness is assessed through the quality of public services, the independence of the civil service, and the government's policy-making and implementation capabilities (Kaufmann et al., 2011; World-Bank, 2024). The Regulatory Quality dimension examines the government's ability to create and implement sound policies and regulations that promote private sector development (Kaufmann et al., 2011; World-Bank, 2024). Further, the Rule of Law dimension gauges the strength of contract enforcement, property rights, the police, and the courts, as well as the prevalence of crime and violence. Lastly, Control of Corruption measures the degree to which public power is exercised for private gain, encompassing both minor and major forms of corruption and the capture of the state by elites and private interests (Kaufmann et al., 2011; World-Bank, 2024). Good governance is central to sustainable development (Stojanović et al., 2016). The implementation of effective governance systems is a crucial aspect of ensuring that decisions made are sound and in the best interest of all stakeholders involved. Such systems also facilitate the efficient allocation and use of resources, resulting in optimal outcomes for the organization and its constituents. On the other hand, governance systems that are deficient in key areas can pave the way for corrupt practices, inefficient resource utilization, and a general lack of faith in the integrity and transparency of public institutions.

2.5. Corruption perception index

The Corruption Perceptions Index (CPI) is a pivotal global indicator, annually published by Transparency International, that ranks countries by their perceived levels of public sector corruption. The CPI is used to measure the level of corruption that is perceived to exist in the public sector of various countries around the world (Alfaro, 2022). The index is based on extensive research, data analysis, and expert assessments, making it a reliable and widely recognized metric for evaluating public sector transparency and accountability. By providing valuable insights into the prevalence of corruption, the CPI helps to promote good governance, strengthen institutions, and support sustainable economic development (Baumann, 2020; Gilman, 2018). The CPI was first launched in the year 1995 and is updated annually. It is a tool used to assess the levels of corruption within countries based on the perceptions of experts and the general public. The CPI is a comprehensive evaluation that utilizes a combination of surveys and assessments from different institutions, ensuring the accuracy and reliability of the results. The index ranks countries based on their scores, which are assigned after aggregating the data collected from the surveys and assessments. The CPI is an essential resource for policymakers, researchers, and civil society organizations looking to understand and address corruption issues within countries. On a scale of 0 to 100, the score indicates the perceived level of public sector corruption, with 0 being highly corrupt and 100 being very clean (Batrancea et al., 2023; Ulman, 2014). The data sources used are based on the perceptions of businesspeople and country experts. A country's score is calculated as the average of all standardized scores available for that country, and scores are then used to rank countries (Lambsdorff, 2006).

The CPI data is collected from a number of reliable sources in order to provide a comprehensive analysis of a country's economic and political landscape. These sources include the World Bank's Country Policy and Institutional Assessment, the World Economic Forum's Executive Opinion Survey, and the Global Insight Country Risk Ratings. By drawing on these sources, the CPI is able to provide a nuanced and detailed understanding of a country's policy and institutional framework, as well as its overall economic and political risk profile (Budsaratragoon & Jitmaneeroj, 2020). The CPI, or Corruption Perceptions Index, is a tool that utilizes scores from various sources to provide a more comprehensive and balanced understanding of corruption levels in different countries. These sources may include surveys of experts, assessments by business professionals, and data from international organizations. By standardizing these scores, the CPI ensures that a consistent metric is applied across countries, enabling easier comparison and analysis of trends in corruption. This approach helps to promote transparency, accountability, and good governance while also facilitating the development of effective anti-corruption strategies (Hamilton & Hammer, 2018). The index has been designed to maintain high levels of reliability by adopting a rigorous approach. As a part of this approach, only those countries that have data from at least three sources are included in the index. This helps to ensure that a country's score is not unduly influenced by a single assessment or opinion, thereby enhancing the accuracy of the overall index (Lambsdorff, 2007b).

3. Empirical literature review and hypothesis development

3.1. Voice and accountability and corruption perception index

One of the core dimensions of public governance is Voice and Accountability (V&A), a metric that captures the level of civic engagement and participation in a nation's governance. The V&A metric considers the extent to which citizens can freely express their views, associate themselves with others, and access impartial media. It also evaluates the role of checks and balances in maintaining a democratic system that fosters transparency, accountability, and responsiveness to citizens' needs. Overall, the V&A metric provides valuable insights into the state of governance in a country and helps to identify areas for improvement (Kaufmann et al., 2010). A functioning V&A infrastructure often refers to an informed population, transparent governance, and diligent media. These elements work collaboratively to deter corrupt undertakings owing to the amplified risk of exposure and public criticism. Hence, nations scoring high on V&A might typically manifest better CPI scores, implying reduced perceived corruption (Lambsdorff, 2008).

A crucial aspect of accountability is the role played by the media. Consistent reporting by the media can lead to less corrupt activities and improve public perceptions. As a result, reinforced V&A may increase perceptions of corruption, even if actual corruption levels remain constant due to heightened awareness and investigation (Brunetti & Weder, 2003). Countries with high V&A scores typically have strong policies and executions that limit corruption in public services and government procurement. Rigorous accountability standards increase the likelihood of officials facing the consequences of corrupt actions, which serve as deterrents (Persson et al., 2013). Civil society organizations are crucial for monitoring government actions and serving as watchdogs to combat corruption. Their proactive stance highlights malfeasance and ensures that perpetrators face the consequences (Gaventa & McGee, 2013). Voice and Accountability and the Corruption Perception Index share a multifaceted relationship. Robust V&A mechanisms often correlate with decreased perceptions of corruption owing to their deterrent nature.

H1: Voice and accountability are positively associated with the corruption perception index.

3.2. Political stability and corruption perception index

Political stability is a crucial factor that determines the likelihood of a government being overthrown or destabilized by violent or unconstitutional methods. The World Bank's Worldwide Governance Indicators offer a comprehensive measurement of political stability, including an evaluation of the potential for politically motivated violence and terrorism. Countries with stable political environments tend to have low levels of violence and terrorism and a high degree of societal trust, all of which are hallmarks of political stability. Therefore, it is essential to maintain a stable political environment to ensure that a government operates effectively and serves its citizens (Kaufmann et al., 2010).

Political stability often provides a predictable policy environment that can deter corruption. Institutions often function more effectively in a stable environment, making enforcement of laws, including anti-corruption legislation, easier. This can affect a country's CPI ranking (Seldadyo & De Haan, 2006). High levels of perceived corruption can lead to political unrest and reduced stability. When corruption is perceived to be endemic, it can trigger protests, reduce trust in the government, and, in extreme cases, contribute to political instability (Treisman, 2000). On the other hand, in some cases, political stability might be maintained through authoritarian means that include suppressing information about corruption. In such scenarios, the CPI might show better results than actual figures due to limited reporting and fear of reprisals (Mungiu, 2006). Resources are often allocated more efficiently in politically stable countries, partly because political volatility does not distort decision-making. This could lower opportunities for corruption, thereby improving the CPI score (Alesina et al., 1996; Alesina & Perotti, 1996).

H2: Political stability is positively associated with the corruption perception index.

3.3. Government effectiveness and corruption perception index

Efficient government operations play a crucial role in preventing corruption. Such operations are characterized by streamlined processes, which ensure that bureaucratic systems function effectively, and transparent mechanisms, which enable citizens to hold public officials accountable. When a government operates efficiently, it creates fewer opportunities for corrupt activities, which in turn can improve a country's overall corruption perception index (CPI) score. An effective oversight mechanism can ensure that regulations comply, thereby reducing the likelihood of corrupt activities. Ultimately, a well-functioning bureaucratic system and an effective oversight mechanism are important measures that can help prevent corruption and promote a fair and just society (Evans & Rauch, 1999). When the perception of corruption is high, it can have detrimental effects on governmental effectiveness. This is because corrupt activities, such as misappropriation of funds and bribery, lead to resources being diverted from their intended purposes. This, in turn, results in a reduction in the overall quality of public services and can make it difficult to implement policies effectively. Therefore, it is important to ensure that corruption is minimized to maintain a strong and effective government that is able to serve its citizens to the best of its ability (Mauro, 1995, 1998).

High government effectiveness can bolster public trust in institutions. When citizens believe that their government is effective, they might perceive it as less corrupt, even if this is not necessarily true. Thus, public perception plays a pivotal role in the interplay between government effectiveness and CPI (Huther & Shah, 2000). Efficient policies and their rigorous implementation can reduce the opportunities for corruption. When policies are well-designed and effectively implemented, gaps that can be exploited for corrupt purposes are minimized. Moreover, when policies are clear, public officials have less discretion, which could further reduce corruption activities (Rose-Ackerman, 1999). Government Effectiveness and the CPI are intimately connected, and their relationship is reciprocal. While an effective government can reduce corruption, it can impede the achievement and maintenance of government effectiveness. Understanding this interplay is critical for policymakers seeking to improve governance and reduce corruption.

H3: Government effectiveness is positively associated with the corruption perception index.

3.4. Regulatory quality and corruption perception index

A regulatory system that is both effective and transparent can significantly reduce avenues for corrupt practices. When regulations are clear, well-defined, consistently enforced, and openly communicated, it becomes increasingly challenging for individuals or entities to engage in or benefit from corrupt activities. Such a system can help achieve a more just and equitable society, where everyone is held accountable for their actions and there are fewer opportunities for corruption to take hold. This can positively influence a nation's CPI score (Djankov et al., 2002). An environment riddled with cumbersome regulations, red tape, and arbitrary bureaucratic decisions can increase the temptation for businesses and individuals to resort to bribery or other corrupt means of expediting processes, thereby worsening the CPI score (Svensson, 2005).

An environment characterized by high regulatory quality often garners greater trust from businesses and the general population. When people perceive that regulations are fair and effectively implemented, their perception of corruption may be lower even if the actual level of corruption remains unchanged (Rodriguez et al., 2005). Quality regulations are often equipped with accountability mechanisms to ensure operational transparency. Such mechanisms reduce discretionary power that might be exploited corruptly and improve oversight, benefiting CPI ranking (Aidt, 2009). The correlation between regulatory quality and the Corruption Perception Index (CPI) is significant (Mujtaba et al., 2018). The implementation of effective regulations can serve as a powerful tool for curbing corrupt practices within a given system. By contrast, the perception of extensive corruption can erode public trust within the regulatory framework. For nations that strive to elevate their regulatory quality and improve their standing in the Corruption Perceptions Index (CPI), it is vital to establish regulations that are open, equitable, and efficient while also being backed by a robust oversight mechanism. By doing so, countries can build a regulatory system that is not only effective but also transparent, which can inspire trust and confidence in the public.

H4: Regulatory quality is positively associated with the corruption perception index.

3.5. Rule of law and corruption perception index

The implementation of a strong rule of law is crucial to prevent corruption. Such a legal system is characterized by an independent and efficient judiciary, which acts as a deterrent against corrupt behavior. When legal institutions are robust, they increase their chances of detecting and prosecuting corrupt activities, leading to a higher likelihood of accountability for wrongdoings. Consequently, countries with strong legal systems tend to score higher on the Corruption Perception Index (CPI), which is a testament to their commitment to transparency, accountability, and good governance (Dakolias, 1999). When a legal system is in place that upholds the Rule of Law, it allows contracts to be recognized and enforced more efficiently. This, in turn, mitigates the need for illegal practices, such as bribery or other corrupt means to secure business interests. As a result, it positively impacts the corruption perception index (CPI), which measures the level of perceived corruption in a given country. Therefore, a fair and unbiased legal system plays a vital role in promoting a healthy business environment that leads to sustainable economic growth.

Robust Rule of Law tends to enhance public trust in institutions. If citizens believe that their rights are protected and that disputes will be adjudicated fairly, they are likely to perceive lower levels of corruption, irrespective of the actual corruption levels (Buscaglia & Ulen, 1997). Conversely, pervasive corruption can erode the rules of law. When public officials, including those in the judiciary, are perceived as corrupt, the general populace may lose faith in the legal system, reducing adherence to the Rule of Law (Mungiu, 2006). The rule of law and corruption perception index (CPI) are closely connected. When a strong Rule of Law framework is in place, it can help prevent corrupt practices. However, if corruption is perceived as high, it can negatively impact the trust and effectiveness of legal institutions. This can, in turn, affect a country's efforts to improve its Rule of Law framework and standing in the CPI. Therefore, it is essential to strengthen legal institutions, ensure judicial independence, and build public trust in order to improve the Rule of Law and the CPI standing of a country.

H5: The rule of law is positively associated with the corruption perception index

3.6. Control of corruption and corruption perception index

Control of Corruption Index and the Corruption Perception Index (CPI) are two measures that are closely associated with one another. A country with a robust system in place to manage and control corruption is more likely to score higher on the CPI, indicating that it is perceived as less corrupt. Both indices were designed to assess different aspects of corruption, with the CPI focusing on people's perceptions of corruption. By contrast, the Control of Corruption index examines the actual control mechanisms in place to combat corruption. These measures are crucial in identifying the weaknesses and strengths of a country's anti-corruption efforts and play a vital role in shaping policies designed to combat corruption (Lambsdorff, 2007b). The implementation of effective control measures can significantly influence the perceptions of the general public and experts. When these measures are visible and tangible, such as through judiciary verdicts, legislative actions, or public policies, they can have a positive impact on a state's corruption perception index (CPI) score. In other words, when a state takes concrete steps to combat corruption, this can be reflected in its CPI score, which, in turn, can improve its reputation and standing in the eyes of the international community (Doig et al., 2005).

The effective implementation of strong anti-corruption policies plays a crucial role in improving corruption control. When these policies are clearly visible, and their impact is tangible and measurable to the public and experts, they can significantly influence the perception of how well a country is managing corruption. This, in turn, can positively impact the Corruption Perceptions Index (CPI) score, which is a globally recognized indicator of a country's level of corruption. Therefore, it is vital to implement and enforce anti-corruption policies that are not only robust but also transparent and accessible to all (Seldadyo & De Haan, 2006). Although both indices revolve around corruption, they capture different nuances. Control of Corruption Index evaluates the actual measures and systems in place by a state to tackle corruption. However, the Corruption Perception Index (CPI) primarily focuses on the perception of corruption, which might not reflect the actual efforts taken by the state. Furthermore, perception can be influenced by external factors such as global narratives and media coverage (Treisman, 2007). The control of corruption and the corruption perception index (CPI) are closely intertwined, and their relationship is dynamic. Countries with effective measures to control corruption tend to have better perceptions of corruption both domestically and internationally. As such, corruption control is often seen as a key indicator of a country's overall governance and adherence to the rule of law. Conversely, countries with poor control over corruption tend to have low levels of trust in public institutions and high rates of bribery and other corrupt practices. Therefore, governments need to implement robust anti-corruption measures to foster a culture of transparency and accountability and to promote public trust in their institutions.

H6: Control of corruption is positively associated with the corruption perception index.

3.7. Moderating role of income per capita

Empirical and theoretical evidence suggests that robust public governance is inversely related to the level of corruption. Nations endowed with rigorous institutional frameworks, transparent mechanisms, and accountability provisions tend to be less susceptible to corrupt activities (Lambsdorff, 2007b). Nations with substantial income per capita possess enhanced fiscal wherewithal to channel investments into pivotal public sectors, such as education, the judiciary, and healthcare. Investing in these areas strengthens the foundation of public governance and reduces opportunities for corruption (Mauro, 1995). As income per capita increases, societal norms and expectations shift. Affluent societies tend to harbor heightened expectations concerning governance transparency, and exhibit diminished tolerance for corrupt practices (Treisman, 2007).

High-income per capita nations often have more robust institutional structures, better rules of law, and advanced public service mechanisms. These elements, in tandem, can mean that while good governance is expected, perceived corruption may be similar to fluctuations in governance quality (Lambsdorff et al., 2004). Low-income per capita may have less entrenched institutional systems. Even small enhancements in public governance can significantly shift perceptions of corruption. However, a lower threshold for corruption acceptance might exist because of socioeconomic challenges (Lambsdorff et al., 2004).

In countries with high income per capita, institutions might be better developed, and more resources might be available for effective governance. Moreover, the cost of engaging in corrupt practices may be higher in terms of potential penalties, both legal and social. Thus, the relationship between good governance and lower corruption may be stronger in these countries (Lambsdorff, 2007). Conversely, even if governance structures are in place in low-income countries, the lack of resources and perhaps a higher immediate necessity for personal gain may make the fight against corruption more challenging. The relationship between governance and corruption in these settings may be weaker or more complex (Charron et al., 2013).

H7: National income per capita positively moderates the relationship between Voice and Accountability and the corruption perception index

H8: National income per capita positively moderates the relationship between political stability and the corruption perception index

H9: National income per capita positively moderates the relationship between government effectiveness and the corruption perception index

H10: National income per capita positively moderates the relationship between regulatory quality and the corruption perception index

H11: National income per capita positively moderates the relationship between the rule of law and the corruption perception index

H12: National income per capita positively moderates the relationship between control of corruption and the corruption perception index

4. Methodology

4.1. Population and sample

This comprehensive study delves into the governance practices of all nations that are part of The World Bank, with specific attention given to countries that have demonstrated strong scores in key areas, such as voice and accountability, political stability, government effectiveness, regulatory quality, rule of law, control of corruption, and the corruption perception index (CPI) between 2012 and 2021. The research is based on a carefully selected sample of countries that reflects a decade-long timeline, providing a detailed analysis of the governance practices in these countries and their impact on overall economic and social development.

4.2. Model Estimation and analysis

The study proposes that the Corruption Perception Index (CPI) is the function of voice and accountability (VOACC), political stability (POLSTA), government effectiveness (GOVEC), regulatory quality (REQUAL), rule of law (RULAW), control of corruption (CONRUP) Considering the data is panel data, model estimation is constructed as follows: Model 1 $${\text{CPI}}_{\text{it}}=\hspace{0.17em}\text{Constant}\hspace{0.17em}+\hspace{0.17em}{\text{VOACC}}_{\text{it}}+\hspace{0.17em}{\text{POLSTA}}_{\text{it}}+\hspace{0.17em}{\text{GOVEC}}_{\text{it}}+\hspace{0.17em}{\text{REQUAL}}_{\text{it}}+\hspace{0.17em}{\text{RULAW}}_{\text{it}}+\hspace{0.17em}{\text{CONRUP}}_{\text{it}}+\hspace{0.17em}\text{error}\mathrm{.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.}$$Model 1

In addition to proposing model estimation, as stated in Model 1, the study also proposes a model estimation that involves interaction with a moderating variable, namely income per capita (IPC). A model estimation that includes interactions with moderating variables was formulated as follows: Model 2 $$\begin{array}{c}{\text{CPI}}_{\text{it}}=\text{\hspace{0.33em} Constant}\hspace{0.17em}+\hspace{0.17em}{\text{VOACC}}_{\text{it}}+\hspace{0.17em}{\text{POLSTA}}_{\text{it}}+\hspace{0.17em}{\text{GOVEC}}_{\text{it}}+\hspace{0.17em}{\text{REQUAL}}_{\text{it}}+\hspace{0.17em}{\text{RULAW}}_{\text{it}}+\hspace{0.17em}{\text{CONRUP}}_{\text{it}}\\ +\hspace{0.17em}{\text{IPC}}_{\text{it}}+\hspace{0.17em}\text{VOACC}*{\text{IPC}}_{\text{it}}+\hspace{0.17em}\text{POLSTA}*{\text{IPC}}_{\text{it}}+\hspace{0.17em}\text{GOVEC}*{\text{IPC}}_{\text{it}}+\hspace{0.17em}\text{REQUAL}*{\text{IPC}}_{\text{it}}\\ +\hspace{0.17em}\text{RULAW}*{\text{IPC}}_{\text{it}}+\hspace{0.17em}\text{CONRUP}*{\text{IPC}}_{\text{it}}+\hspace{0.17em}\text{error}\mathrm{.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.\hspace{0.17em}.}\end{array}$$Model 2

To obtain a better understanding of the research structure, Figure 1 provides a graphic visualization that highlights the key components of the research model and the relationships between them, as stated in Model Estimation 1 and Model Estimation 2.

Figure 1. Research model.

We adopted Generalized Estimating Equations (GEE) to run analysis of Model Estimation 1 and Model Estimation 2. The application of GEE in our study represents a deliberate methodological choice aimed at addressing the inherent complexities of analyzing panel data, particularly when exploring the dynamic interplay between public governance, national income, and the Corruption Perception Index (CPI) across multiple countries and over an extended period. The decision to utilize GEE is rooted in its capacity to offer robust estimates in the face of potential endogeneity issues, including those arising from omitted variable biases, measurement errors, and reverse causality (Molenberghs et al., 2019; Wang, 2014).

GEE is particularly adept at handling correlated response data that is typical in longitudinal and multi-site studies (Hanley et al., 2003; Wang et al., 2024). The GEE method extends generalized linear models (GLM) to accommodate correlated observations (Wilson et al., 2020), thereby enabling the analysis of repeated measures and clustered data commonly encountered in public governance construct and corruption perception index. One of the pivotal strengths of GEE lies in its ability to produce consistent and efficient parameter estimates without requiring strict assumptions about the underlying population distribution (Leung et al., 2009; Wang, 2014), making it particularly suited for the complex, multi-dimensional data our study encompasses.

Addressing the endogeneity concern, GEE facilitates the inclusion of within-group correlations and time-varying covariates, offering a mechanism to control for unobserved heterogeneity that might otherwise bias the estimates (Liu & Perera, 2023). By accounting for the correlation within countries over time, GEE helps to mitigate the impact of omitted variables that are constant within clusters but vary across them. This is critical in our context, where governance indicators and corruption perceptions may be influenced by unmeasured country-specific factors that evolve over the study period.

4.3. Variable operationalization and measurement

This study focuses on the Corruption Perception Index, which is used as a dependent variable to evaluate the level of corruption in a country. The study also explores various independent variables, such as voice and accountability, political stability, government effectiveness, regulatory quality, rule of law, and control of corruption, which are believed to have a significant impact on corruption perception. Additionally, this study examines income per capita as a moderating variable, which is expected to influence the relationship between the independent and dependent variables. For a better understanding of the variables used in this study, refer to Table 1, which provides a detailed description of each variable.

Table 1. Variable operationalization.

Variable	Function	Variable operationalization	Scale
Corruption Perception Index	Dependent variable	Corruption Index published by Transparency International Organization.	Ratio, 0-100, The higher the index the less corrupt
Voice and accountability	Independent variable	Worldwide governance indicators published by the World Bank	Ratio, 0-100, The higher the index the better the performance of public governance
Political stability	Independent variable
Government effectiveness	Independent variable
Regulatory quality	Independent variable
Rule of Law	Independent variable
Control of corruption	Independent variable
Income per capita	Moderating Variable	Classification of income per capita into low income, lower middle income, upper middle income, and high income following the world Bank Organization	Nominal

5. Results

5.1. Descriptive statistics of corruption perception index

Table 2 displays the perceptions of corruption across different regions of the world, such as America, Asia Pacific, Europe and Central Asia, the Middle East and North Africa, Sub-Saharan Africa, and Western Europe. The Corruption Perception Index, which ranges from 0 to 100, with higher scores indicating lower levels of corruption, was used to measure these perceptions. While Western Europe is generally considered to have the lowest levels of corruption, other regions such as Sub-Saharan Africa, Europe, and Central Asia have been perceived to struggle with higher levels of corruption. It s fascinating that the scores within regions, particularly Asia, suggest that different countries within the same region experience corruption differently. These valuable insights can help shape governance and anti-corruption measures at a regional level.

Table 2. Corruption Perception Index by Region.

	Corruption Perception Index
Region	America	Asia Pacific	Europe & Central Asia	Middle East & North Africa	Sub Saharan Africa	Western Europe
Valid Data	311	294	190	180	483	310
Mean	43.70	43.90	34.16	38.89	32.33	66.06
Std. Deviation	17.07	20.94	8.96	16.36	12.28	14.88
Minimum	14.00	8.00	17.00	13.00	8.00	36.00
Maximum	84.00	91.00	58.00	71.00	70.00	92.00

After examining the different global regions, it is evident that there are disparities in perceptions of corruption among them. Western Europe is recognized as having a minimal corruption perception, which is in stark contrast to the perception of corruption in Sub-Saharan Africa. The Asia-Pacific region showed the most significant variation in perceptions, while Europe and Central Asia displayed the least variability. The Americas and Asia-Pacific have nearly identical average scores, but they differ in their range and elevated standard deviation, highlighting striking intra-regional disparities in corruption perceptions in the Asia-Pacific region. Sub-Saharan Africa revealed a worrying trend, with the lowest average CPI score indicating the highest perceived corruption. However, the score distribution in this region suggests a diverse perception of corruption among its nations, emphasizing that not all countries are perceived similarly. Figure 2 shows a graphical visualization of the average Corruption Perception Index based on the region.

Figure 2. Average Corruption Perception Index by Region.

Table 3 provides an insightful analysis of the relationship between a country's economic prosperity, measured by Income Per Capita, and perceived level of corruption. The data highlight a strong correlation between a nation's income level and its perceived corruption. Generally, countries with higher income levels tended to have lower perceptions of corruption, as evidenced by an average CPI score of 69.18. On the other hand, low-income countries exhibited a higher perception of corruption, as shown by an average CPI score of 25.43. This suggests that wealth may play a role in shaping perceptions of corruption. However, the variability in perceptions, as indicated by the standard deviations, indicates a more nuanced reality. Specifically, even among high-income countries, there is significant variation in corruption perceptions, indicating that wealth alone is not a guarantee of uniformly low corruption perceptions.

Table 3. Corruption Perception Index by Income Category.

	Corruption Perception Index
Country Income Category	High Income Country	Low Income Country	Lower Middle Income Country	Upper Middle Income Country
Valid data	385	356	489	538
Mean	69.18	25.43	34.31	43.90
Std. Deviation	14.00	9.43	9.53	13.56
Minimum	36.00	8.00	15.00	14.00
Maximum	92.00	56.00	68.00	76.00

Corruption becomes more significant in low-income countries, where there is a consistent and widespread perception of corruption, as indicated by the low average CPI score and relatively low standard deviation. Interestingly, a nuanced dynamic exists when evaluating middle-income nations. Upper-middle-income countries tend to have a more favorable perception of corruption than their lower-middle-income counterparts. This suggests that, as countries progress economically, there may be corresponding improvements in their perceptions of corruption. However, policymakers should consider the pressing need for robust anti-corruption strategies, particularly in economically challenged regions. Additionally, the variability within the high-income bracket reminds us that achieving economic prosperity does not conclusively eradicate corruption challenges. Figure 3 provides a graphical representation of the average Corruption Perception Index Based on Income per capita.

Figure 3. Average Corruption Perception Index by Income per Capita.

5.2. Descriptive statistics of public governance

Figure 4 presents a comprehensive analysis of the quality of governance and institutional integrity across different regions of the world, including sub-Saharan Africa, Western Europe, European Central Asia, Asia Pacific, America, and the Middle East and North Africa. This information indicates that Western Europe is perceived as a leader in governance metrics, constantly outperforming other regions in critical indicators, such as Voice and Accountability, Political Stability, and Control of Corruption.

Figure 4. Average Public Governance Score by Region.

The scores for Sub-Saharan Africa, the Middle East, and North Africa are comparatively low, which suggests that these regions face challenges related to governance, limited political freedom, and high levels of corruption. On the other hand, Western Europe has higher scores, indicating greater political freedom and citizen participation in governance, as well as streamlined public services and committed civil services. The variance in scores in the Voice and Accountability metric highlights the distinct differences in political freedom and citizen participation in governance between Western Europe and Sub-Saharan Africa. Additionally, Western Europe is relatively peaceful and stable compared with the politically tumultuous regions of European Central Asia and Sub-Saharan Africa. Overall, the high scores in the Government Effectiveness metric for Western Europe imply that this region has efficient public services and a strong civil service, while the scores for sub-Saharan Africa suggest potential bureaucratic inefficiencies.

The Regulatory Quality metric shows that Western Europe has an advantageous business environment, with consistent regulations and supportive policies. By contrast, regions such as Sub-Saharan Africa may face challenges due to policy inconsistencies. The data on the rule of law indicates a strong legal framework for Western Europe. Simultaneously, European Central Asia and Sub-Saharan Africa may experience difficulties related to judicial autonomy and legal enforcement. Finally, the Control of Corruption measure highlights the vigilance of Western Europe against corrupt practices while also exposing vulnerabilities in regions such as Sub-Saharan Africa. These insights can guide policymakers and investors in understanding the governance landscape of different regions and identifying potential areas for improvement.

Figure 5 is an important resource for understanding the relationship between a country's income classification and governance measures. The figure evaluates six key governance criteria: Voice and Accountability, Political Stability, Government Effectiveness, Regulatory Quality, Rule of Law, and Control of Corruption. This offers an insightful perspective on how economic prosperity and good governance may intersect.

Figure 5. Average Public Governance Score Based on Income per Capita.

The Voice and Accountability scores suggest that political participation and freedom of expression are limited in low- and lower-middle-income countries. In contrast, upper-middle and high-income nations exhibit more robust civil liberties. Countries with higher incomes are less prone to political disturbances, and high-income nations demonstrate the most stability in this regard. Regarding Government Effectiveness, high-income countries outshine their counterparts with a strong emphasis on efficient public services and effective policy implementation. In contrast, low-income nations face challenges in terms of public administration. Regulatory Quality is directly linked to a country's economic status, with higher-income nations fostering an environment that is more conducive to private sector growth. The Rule of Law is markedly stronger in high-income countries and reflects a trustworthy and accountable legal system. Conversely, lower scores in low- and lower-middle-income countries suggest potential judicial inefficiency. Lastly, the Control of Corruption scores emphasize that high-income countries have superior mechanisms to deter corruption, while nations with lower incomes might benefit from more stringent anti-corruption measures. Overall, these governance indicators link economic prosperity to effective governance.

5.3. Correlation analysis

This study examines the relationship between governance metrics and the public's perception of corruption. Table 4 presents a clear and striking correlation between the governance variables. Specifically, it highlights an almost perfect link between the Corruption Perception Index (CPI) and the Control Corruption metric with a coefficient of 0.971. This indicates that as countries take more effective measures to control corruption, the public's perception of corruption is significantly improved. Additionally, the study uncovers a strong association between the CPI and the 'Rule of Law' metric, with a coefficient of 0.939. This emphasizes the essential role that a nation's legal system plays in shaping the public's perception of corruption.

Table 4. Correlations Output.

	Variable	1	2	3	4	5	6	7
1	Corruption Perception Index	1
2	Voice and Accountability	0.804	1
3	Political Stability	0.809	0.723	1
4	Government Effectiveness	0.902	0.752	0.75	1
5	Regulatory Quality	0.874	0.796	0.719	0.927	1
6	Rule of Law	0.939	0.812	0.799	0.938	0.928	1
7	Control of Corruption	0.971	0.792	0.807	0.908	0.868	0.946	1

Upon careful analysis of the metrics, we have come to the conclusion that the 'Voice and Accountability' metric holds great significance in determining a country's ability to provide its citizens with the right to participate in the election process and exercise their freedom of speech. This metric exhibits a strong correlation with the Rule of Law (0.812), indicating that nations with transparent accountability mechanisms tend to follow it more effectively. It is worth noting that 'Political Stability' is closely associated with both the 'Rule of Law' and the CPI metric, implying that countries with stable political climates are perceived as less corrupt and more committed to upholding the rule of law. Overall, these metrics provide valuable insights into a country's governance structure and play a crucial role in shaping public opinion and perceptions.

Upon conducting a comprehensive analysis of 'Government Effectiveness,' it is apparent that it exhibits a robust and highly significant correlation with 'Regulatory Quality.' The high coefficient of 0.927 demonstrates that countries with proficient governance not only excel in their administrative capabilities, but also tend to enforce policies and regulations that are easily accessible, user-friendly, and beneficial to their citizens. The correlation between 'Government Effectiveness' and 'Regulatory Quality' underscores the importance of effective governance in creating a regulatory environment that supports economic growth and development. Furthermore, 'Regulatory Quality' is intricately connected to the 'Rule of Law,' highlighting the pivotal role that legal frameworks play in public administration. These findings provide valuable insights into the complex dynamics underlying effective governance and regulatory practices and can guide policymakers and leaders in their efforts to create robust and sustainable governance systems.

The Rule of Law is a fundamental principle of governance that emphasizes the need for a society to be governed based on established laws rather than the whims of individuals or those in power. Research has shown that this concept is crucial in shaping other governance measures, highlighting the importance of establishing a strong legal framework that can promote good governance and curtail corruption. The 'Control Corruption' metric is closely tied to the 'Rule of Law' and 'Government Effectiveness' variables, indicating the need for robust legal and governance systems to counteract corruption effectively. In summary, the interdependence between different aspects of good governance can be complex, but the Rule of Law is a central pillar in this intricate web, ensuring that a society is governed fairly, transparently, and accountable.

The Corruption Perception Index (CPI) is a widely recognized measure of corruption in different countries. Recent studies have found that the CPI is strongly related to various public governance components such as Voice and Accountability, Political Stability, Government Effectiveness, Regulatory Quality, Rule of Law, and Control of Corruption (Monteduro et al., 2016; Naher et al., 2020). This suggests that the quality of governance and the level of corruption are closely intertwined. It is essential to adopt a comprehensive and integrated approach to improve governance and fight corruption. Such an approach would recognize the interdependent nature of these two domains and address the complex and multifaceted challenges that arise when dealing with governance and corruption.

5.4. Direct effect analysis

Table 5 displays the findings of a statistical analysis utilizing the Generalized Estimating Equations (GEE) model. The model examines the relationship between the Corruption Perception Index (CPI) and a set of public governance indicators. The CPI acts as the dependent variable, while public governance indicators, which are considered independent variables, are used to predict CPI values. A panel data regression method was employed to analyze the data.

Table 5. Regression analysis output - direct effect.

	Generalized Estimating Equations (GEE)
Model Analysis	Corruption Perception Index
	Coefficient	Std. Error	z	P-value	95% conf. Interval
Voice and Accountability	0.1041680	0.0131346	7.93	0.0000	0.0784246	0.1299113
Political Stability	0.0201221	0.0088921	2.26	0.0240	0.0026938	0.0375503
Government Effectiveness	0.0341588	0.0127168	2.69	0.0070	0.0092343	0.0590834
Regulatory Quality	0.0512218	0.0138563	3.70	0.0000	0.0240639	0.0783797
Rule of Law	0.0935040	0.0164056	5.70	0.0000	0.0613495	0.1256584
Control of Corruption	0.3235285	0.0126631	25.55	0.0000	0.2987092	0.3483478
Constant	13.7631200	0.6071176	22.67	0.0000	12.57319	14.95304
Number of Observation	1768
Number of Group	180
Wald Chi-Squared	3950.48
Probability	0.0000

The principles of Voice and Accountability are at the core of democratic governance. This principle represents the extent to which citizens are allowed to participate in the selection of their government and express themselves freely through associations and media. A coefficient of 0.1041680 reveals an interesting story. The stronger the foundation of Voice and Accountability, the more positive the public perception, and the lower the likelihood of perceived corruption. The statistical data, with a p-value of 0.0000 and a significant z-value of 7.93, demonstrate that promoting transparent and participatory governance has real benefits in shaping public sentiment towards corruption. The positive coefficient highlights the critical role of citizen participation and freedom in reducing perceived corruption. Countries that ensure greater participation, freedom of expression, and robust media oversight tend to perceive themselves as less corrupt.

Assessment of Political Stability often involves evaluating the likelihood of political unrest or violence. Its connection with the Corruption Perception Index (CPI) is complex. Although the figure for 0.0201221 shows that political stability has a minor impact on perceptions of corruption, the p-value of 0.0240 suggests that it remains a crucial factor. Countries with stable regimes that do not experience upheavals provide a sense of continuity that indirectly discourages the perception of corruption. Political Stability measures the probability of political instability, violence, or terrorism. A stable political environment usually leads to better governance and reduced corruption. However, the small coefficient and lack of significance suggest that other factors may outweigh their direct impact on corruption perception.

The term 'Government Effectiveness' refers to how well a government operates, which includes the quality of public services, the government's independence from political pressures, and the level of citizens' trust in the government's policies. The coefficient of 0.0341588 shows that effective governance can improve the Corruption Perception Index (CPI). Additionally, the significant p-value of 0.0070 supports the argument that citizens are likely to perceive less corruption when the government operates optimally. Government Effectiveness measures the quality of public services, the autonomy of civil services from political pressures, policy formulation and execution, and the credibility of government policies. The positive coefficient emphasizes the crucial role of an efficient government apparatus in shaping perceptions of corruption. Countries that improve public service delivery, policy formulation, and execution are expected to receive better scores on the corruption-perception scale.

It is often overlooked that policy formulation and the government's ability to create well-crafted policies can have a significant impact on public opinion. A coefficient of 0.0512218, along with a p-value of 0.0000, highlights the importance of creating transparent, fair, and consistent regulations to prevent the perception of corruption. When citizens perceive that regulations are formulated transparently and enforced fairly, their likelihood of perceiving corruption decreases. Regulatory quality refers to a government's capacity to establish and implement policies and regulations that promote growth in the private sector. Regulations that are transparent and consistently enforced reduce the opportunities for corruption. Therefore, countries with better regulatory quality are considered less corrupt.

The Rule of Law is more than just following the legal codes. It encompasses justice, fairness, and equal treatment under law. If a society consistently upholds the law with fairness, it is less likely to be considered corrupt, as indicated by the coefficient of 0.0935040. A significance level of 0.0000 sends a clear message to policymakers that establishing and maintaining a strong Rule of Law is vital for reducing perceptions of corruption. This involves various factors including contract enforcement, property rights, law enforcement, and courts, all of which contribute to people's trust in societal rules. The strong correlation between the Rule of Law and CPI highlights the essential role of judicial integrity, property rights, and law enforcement in shaping perceptions of corruption. When laws are enforced equitably within a robust legal system, trust in society grows and perceptions of corruption decrease.

The corruption control factor aims to prevent the misuse of public power for personal gain. The coefficient of a given number serves as a strong reminder of the significant impact that anti-corruption efforts can have on the CPI (Corruption Perceptions Index). Its z-value of 25.55 and p-value of 0.0000 demonstrate that direct measures to combat corruption are the most effective in changing societal perceptions of corruption. Control of Corruption measures the extent to which public power is utilized for private gain and encompasses both minor and major forms of corruption. This close relationship underscores the direct and profound link between actual control of corrupt practices and the perception of corruption. Countries that successfully control corrupt practices, ranging from small bribes to large embezzlements, are considered less corrupt.

Table 6 summarizes the conclusions of the hypotheses. The results show that all aspects of public governance, including voice and accountability, political stability, government effectiveness, regulatory quality, the rule of law, and control of corruption, are positively and significantly related to the corruption perception index.

Table 6. Hypothesis conclusion – direct effect.

Hypothesis Statement	Expected Sign Coef	Result Sign Coef	P-Value	Conclusion on Hypothesis
Voice and Accountability has a positive influence on the corruption perception index (H1)	+	+	0.0000	Supported
Political stability has a positive influence on the corruption perception index (H2)	+	+	0.0240	Supported
Government effectiveness has a positive influence on the corruption perception index (H3)	+	+	0.0070	Supported
Regulatory quality has a positive influence on the corruption perception index (H4)	+	+	0.0000	Supported
The rule of law has a positive influence on the corruption perception index (H5)	+	+	0.0000	Supported
Control of corruption has a positive influence on the corruption perception index (H6)	+	+	0.0000	Supported

5.5. Moderating effect analysis

This study investigates the influence of public governance on the corruption perception index (CPI) and explores the potential moderating role of per-capita income. The hypothesis was that income per capita may moderate the relationship between public governance and the CPI. To test this hypothesis, the regression analysis incorporated the moderating variable, income per capita, and its interaction with various public governance factors, including voice and accountability, political stability, government effectiveness, regulatory quality, rule of law, and corruption control. The results of the moderated regression analysis are presented in Table 7.

Table 7. Moderated regression analysis output - moderating effect.

	Generalized Estimating Equations (GEE)
Model Analysis	Corruption Perception Index
Dependent Variable (DV)	Coefficient	Std. Error	z	P-value	95% conf. Interval
Voice and Accountability	0.0201186	0.0278689	0.72	0.470	−0.0345033	0.0747405
Political Stability	0.0826074	0.0209973	3.93	0.000	0.0414534	0.1237613
Government Effectiveness	0.1035976	0.0399298	2.59	0.009	0.0253367	0.1818586
Regulatory Quality	0.0982027	0.0349931	2.81	0.005	0.0296175	0.166788
Rule of Law	0.0423132	0.0446337	0.95	0.343	−0.0451672	0.1297935
Control Corruption	0.1883936	0.0311030	6.06	0.000	0.1274329	0.2493543
Moderating Variable (MV)
Income Per Capita (IPC)	0.5758050	0.389813	1.48	0.140	−0.1882144	1.339824
Interaction DV and MV
Voice and Accountability*IPC	0.0246268	0.0117578	2.09	0.036	0.001582	0.0476715
Political Stability*IPC	−0.0268088	0.0094034	−2.85	0.004	−0.0452391	−0.0083785
Government Effectiveness*IPC	−0.0405926	0.0166972	−2.43	0.015	−0.0733186	−0.0078667
Regulatory Quality*IPC	−0.0196482	0.0157926	−1.24	0.213	−0.0506011	0.0113046
Rule of Law*IPC	0.0218215	0.019397	1.12	0.261	−0.016196	0.059839
Control Corruption*IPC	0.0600382	0.014459	4.15	0.000	0.0316991	0.0883774
Constant	13.68853	0.7064652	19.38	0.000	12.30388	15.07317
Number of Observation	1768
Number of Group	180
Wald Chi-Squared	4534.49
Probability	0.0000

After closely examining them, we discovered an interesting correlation between Voice and Accountability and Income Per Capita (IPC). The coefficient of 0.0246268 suggests that, as countries become more economically prosperous, the positive impact of Voice and Accountability on perceptions of corruption also increases. This may indicate that individuals in countries with higher IPC have better access to education, knowledge, and communication channels, which amplifies the influence of Voice and Accountability in shaping perceptions of corruption. Additionally, the p-value of 0.036 confirms this correlation to be statistically significant, indicating that it is not a chance occurrence but a genuine relationship.

The relationship between political stability and the Corruption Perception Index (CPI) is an interesting topic involving complex dynamics. Studies have shown that the negative coefficient of -0.0268088 suggests that, as a country's wealth increases, it may counterbalance the positive influence of political stability on the perception of corruption. This could be because political stability is already considered a given in prosperous nations, making any direct impact on perceptions of corruption less noticeable. This study reinforces the findings with a p-value of 0.004, highlighting the significant correlation between political stability and economic prosperity.

Upon examining the correlation between Government Effectiveness and IPC, it becomes apparent that while the former influences perceptions of corruption, this influence tends to diminish somewhat with higher IPC values. This observation is supported by a coefficient of -0.0405926, indicating that marginal enhancements in government effectiveness in affluent nations with well-established systems and structures may not necessarily translate into improved perceptions of corruption. The significance level of this finding, as indicated by a p-value of 0.015, confirms the subtleties of this relationship.

The correlation between Regulatory Quality and perceptions of corruption remains stable, despite varying income levels. The -0.0196482 coefficient and p-value of 0.213 imply that fluctuations in IPC have no notable impact on Regulatory Quality's impact on corruption perceptions. This insight suggests that regulations' perceived caliber and efficacy in shaping attitudes towards corruption remain constant, irrespective of economic well-being.

The relationship between the Rule of Law and IPC is complex. While there are indications that IPC could enhance the influence of the Rule of Law on the perception of corruption, as evidenced by the coefficient of 0.0218215, the p-value of 0.261 suggests that the observed effect may not be strong enough to draw definitive conclusions. While the Rule of Law remains critical in shaping attitudes toward corruption, its importance may not change significantly in response to economic fluctuations.

According to the data, there was a significant correlation between effectively managing corruption and positive attitudes. Notably, the coefficient of 0.0600382 indicates that anti-corruption efforts have a more pronounced effect on shaping favorable perceptions in countries with higher IPC. This could be due to the fact that more prosperous nations possess the requisite resources, infrastructure, and cultural values that enhance the impact of anti-corruption measures. It is worth noting that the correlation is highly significant, as evidenced by the impressively low p-value of 0.000.

Table 8 presents the hypotheses regarding the moderating variable. According to the results of the moderated regression analysis (Table 7), national income per capita moderated the relationship between voice and accountability, control of corruption, and the corruption perception index. Thus, the relationship between these variables is stronger in countries with higher levels of prosperity.

Table 8. Hypothesis conclusion – moderating effect.

Hypothesis Statement	Expected Sign Coef	Result Sign Coef	P-Value	Conclusion on Hypothesis
National income per capita positively moderates the relationship between Voice and Accountability and the corruption perception index (H7)	+	+	0.036	Supported
National income per capita positively moderates the relationship between political stability and the corruption perception index (H8)	+	–	0.004	Rejected
National income per capita positively moderates the relationship between government effectiveness and the corruption perception index (H9)	+	–	0.015	Rejected
National income per capita positively moderates the relationship between regulatory quality and the corruption perception index (H10)	+	–	0.213	Rejected
National income per capita positively moderates the relationship between the rule of law and the corruption perception index (H11)	+	+	0.261	Rejected
National income per capita positively moderates the relationship between control of corruption and the corruption perception index (H12)	+	+	0.000	Supported

6. Discussion

6.1. Discussion on the direct effect of public governance

This study presents an analysis of the complex relationship between public governance and the corruption perception index (CPI). It examines each aspect of governance, uncovering diverse perspectives pertaining to the subject matter. By scrutinizing how each dimension influences people's perceptions of corruption, this study sheds light on the intricacies of governance and anti-corruption strategies. The findings of this study can provide invaluable insights into the most effective ways to tackle corruption and bolster transparency in public institutions.

The correlation between the Corruption Perception Index (CPI) and Voice and Accountability highlights the crucial role that democratic institutions and free media play in shaping perceptions of corruption (Kaufmann et al., 2011). A transparent and open environment fosters accountability, making it more difficult for corrupt practices to go unnoticed or unaddressed (Besley & Burgess, 2002). The positive relationship between CPI and Voice and Accountability (H1) emphasizes the importance of civic engagement in eradicating corruption (Sen, 2014). This hypothesis underscores the essential role of promoting democratic values, enhancing media freedom, and encouraging civil society involvement in effectively addressing the issue of corruption.

When political institutions are strong, decision-making processes are transparent, and there is no violence or threat, the environment is less conducive to corruption (H2). Political stability typically ensures the continuity of policies and enforcement (Kaufmann, 2007). In turn, this continuity makes it difficult for corrupt practices to thrive. A stable political environment encourages economic development. With increasing economic development, there is usually a higher demand for transparent processes and practices. As economies grow and diversify, the necessity for clean business environments increases, leading to a lower perception of corruption (Aidt, 2009). Civil society organizations and the media usually have a more substantial presence and influence in politically stable nations. Their role in checking for corruption has been well documented (Brunetti & Weder, 2003). In politically tumultuous environments, these entities might be suppressed, thus allowing corruption to flourish.

Literature suggests that there is a correlation between government effectiveness and the Corruption Perception Index (H3). Competent bureaucracies with clear and rational procedures tend to discourage corruption (Evans & Rauch, 1999). An effective government is better equipped to implement anti-corruption policies and ensure compliance, thus enhancing its perceived integrity. The government's ability to develop and implement sound policies is critical for reducing perceptions of corruption. A streamlined and efficient bureaucracy is less likely to have redundancies and ambiguities that can be exploited for corruption purposes (Mauro, 1995). Capacity building and training for government officials, combined with a merit-based system of appointments, can reduce opportunities for corruption.

Research has shown a positive relationship between CPI and regulatory quality (H4). This indicates that countries with well-designed and effectively implemented policies tend to have lower corruption levels. Impartial and transparent regulatory bodies can serve as deterrents against corrupt activities (Aidt, 2009). When the regulatory environment is transparent, corrupt behavior can be discouraged by reducing ambiguity in the regulations and their enforcement (Rodrik & Subramanian, 2003). Therefore, it is crucial to assess and streamline regulatory procedures regularly while engaging with stakeholders to promote transparency and mitigate perceptions of corruption.

The correlation between the rule of law and CPI (H5) supports the widely held belief that countries with a strong legal system and an independent judiciary are less prone to corruption. When laws are applied consistently and fairly, corrupt practices are easier to detect and punish (Djankov et al., 2003). Societies with a robust rule of law have significant legal deterrents against corruption. A judiciary free from political interference inspires trust in the system and ensures that corrupt individuals are held accountable, regardless of their status (North et al., 2009). This means that anti-corruption efforts should prioritize judicial reforms such as expediting trials and reducing political meddling in legal proceedings.

The link between controlling corruption and the corruption perception index (H6) was clear. When a government effectively manages corruption, it is perceived as less corrupt by the public (Lambsdorff, 2006). This emphasizes the importance of both objective measures and perceptions regarding fighting corruption. Measures taken to control corruption directly, such as creating anti-corruption agencies or ombudsmen, positively impact the CPI. As long as these institutions are empowered to act independently, they can serve as deterrents (Rose-Ackerman & Palifka, 2016). Therefore, it is essential to establish and bolster institutional mechanisms that address corruption specifically. Ensuring autonomy and providing necessary resources can enhance their effectiveness.

This research delves into an intricate investigation of the dynamic relationship between public governance and the Corruption Perception Index (CPI), with the primary objective of comprehending how governance practices influence the perception of corruption. One crucial aspect that this study scrutinizes is the paradox where improvements in governance may not necessarily result in reducing corruption levels but can significantly impact its perception. The study notes that perceptions of corruption can subside with the fair and effective implementation of regulations, even if actual corruption levels remain the same. This finding is supported by Yunan et al. (2023) empirical work that reveals a rise in CPI scores concurrently with an increase in the number of convicted corruption perpetrators in Indonesia, indicating a complex interplay between governance measures and corruption perception. Thus, this study emphasizes the need for in-depth research into how governance reforms shape public perception and, consequently, the CPI. This suggests a complex interplay between governance measures and corruption perception, warranting a deeper investigation into how governance reforms shape public perception and, consequently, the CPI. It is essential to consider the broader implications of these findings when addressing the relationship between public governance and corruption perception. The notion that improved governance can lead to an increase in reported corruption cases, thereby influencing the CPI, challenges traditional interpretations of the index. This underscores the importance of adopting a nuanced approach in evaluating the effectiveness of governance reforms, taking into account both the actual reduction in corrupt practices and the changes in public perception reflected in the CPI.

The Worldwide Governance Indicators (WGI) project, developed by the World Bank, presents a comprehensive dataset designed to capture the quality of governance across over 200 countries. The WGI encompasses six dimensions of governance: (1) Voice and Accountability, (2) Political Stability and Absence of Violence/Terrorism, (3) Government Effectiveness, (4) Regulatory Quality, (5) Rule of Law, and (6) Control of Corruption. Each of these dimensions is measured through a composite index that aggregates indicators from multiple sources, offering a broad perspective on governance quality (Apaza, 2009; Kaufmann et al., 2011). A critical aspect of the WGI's construction is its reliance on perception-based data sourced from a diverse array of respondents. This includes surveys and assessments from households and firms, commercial business information providers, non-governmental organizations (NGOs), and public sector organizations (Apaza, 2009; Makuta & O'Hare, 2015). The inclusion of such a wide range of perspectives is instrumental in capturing the nuanced and multifaceted nature of governance within and across countries.

The perception-based nature of the WGI is of paramount importance for several reasons. First, it acknowledges that governance quality is inherently difficult to measure directly due to its complex and abstract nature (Hollyer, 2018). By leveraging perceptions, the WGI can tap into the collective assessment of those most affected by and familiar with governance practices in their respective contexts. Second, the aggregation of data from multiple sources enhances the reliability and validity of the governance assessments, mitigating the biases that might arise from any single source. Despite these strengths, the reliance on perception-based data also introduces certain challenges (Makuta & O'Hare, 2015). Similar to other indices that gauge intangibles such as corruption, the WGI's dependence on subjective assessments means that it is influenced by the respondents' experiences, biases, and expectations (Tempelaar et al., 2020). This subjectivity is a critical factor to consider when interpreting the WGI scores, as it may reflect variations in perception rather than objective differences in governance quality.

6.2. Discussion on the moderating effect of national income per capita

Extensive research has been conducted on the complex relationship between public governance, the Corruption Perception Index (CPI), and the moderating impact of National Income Per Capita (IPC). This study primarily aims to investigate the hypothesis that a country's per capita income can either strengthen or weaken the link between governance and corruption perception. Thus, IPC serves as a contextual factor that shapes trends in the perception of corruption. This study delves deep into the intricate nuances of these factors and explores how they interact with each other to influence people's perceptions of corruption in a given country. By examining these dynamics, this study provides valuable insights into how policymakers can develop effective strategies to combat corruption and promote effective governance.

Based on the available data, countries with higher income per capita experience a more pronounced positive effect of Voice and Accountability on the perception of corruption (H7). This observation implies that wealthier nations tend to possess more robust institutions and engaged civil societies, strengthening accountability mechanisms and transparency (Besley & Persson, 2011). A higher national income may empower citizens to demand transparency and voice their grievances, resulting in heightened perceptions of reduced corruption. Hypothesis H7 indicates that an increase in IPC results in a heightened association between CPI and Voice and Accountability. This can be attributed to economic development theories that propose that countries with higher income levels are inclined to invest in institutions that encourage transparency and civic involvement. As a nation's prosperity grows, its inhabitants may aspire to more effective governance and possess the resources to ensure that those in power are answerable. This could lead to a perceived decrease in corrupt practices.

The rejection of Hypotheses H8 through H11 creates a more complex picture. This finding suggests that certain dimensions of governance may not always be tied to a country's wealth. For instance, a country's political stability (H8) may be influenced by factors such as history, culture, and geopolitics, which may not be affected by changes in income (Fearon & Laitin, 2003). Similarly, the connection between government effectiveness (H9), regulatory quality (H10), and the perception of corruption may depend on ingrained bureaucratic practices, systems, and values that may not necessarily correspond with economic indicators. The rule of law (H11) reflects legal culture, judicial independence, and historical precedent elements that may remain unaltered despite fluctuations in economic conditions (North, 2019).

Corruption control has a greater impact in nations with higher levels of IPC (H12). This could be attributed to superior resources and infrastructure, a more educated population in wealthier countries, and better equipped to demand and enforce anti-corruption measures. Furthermore, wealthier nations may possess sophisticated mechanisms and technologies to monitor and prevent corruption, thereby rendering their controls more effective. This observation aligns with the findings of prior research conducted by Mauro (1995). Thus, the significance of H12's confirmation cannot be overstated. This indicates that as nations prosper, their ability to combat corruption becomes increasingly apparent. With the capability to access advanced technologies and specialized personnel, wealthier countries are better equipped to thoroughly scrutinize, monitor, and deter corrupt activities (Lambsdorff, 2006). Moreover, affluent nations are often subject to international scrutiny and integrated into global systems that demand transparency in transactions, further underscoring their unwavering commitment to fighting corruption.

7. Conclusion

Our research has delved into the intricate connections between various dimensions of public governance and the Corruption Perception Index (CPI), revealing a complex web of dynamics at play. Our findings underscore the pivotal role played by a multitude of factors, such as democratic institutions, civic engagement, political stability, governmental efficacy, legal tenets, regulatory quality, and direct corruption control measures in shaping perceptions of corruption. Interestingly, our research has brought to light an intriguing and vital aspect of governance studies: the absence of a direct correlation between political stability and the CPI. Political stability, a hallmark of good governance, may have dimensions that are yet to be uncovered in relation to corruption perceptions. Our research offers a comprehensive understanding of the multifaceted nature of governance and corruption and the need for a nuanced approach to tackling these challenges.

This research delves into the intricate interplay between public governance, the Corruption Perception Index (CPI), and the role of National Income Per Capita (IPC) in moderating corruption perceptions. The findings highlight the multifaceted dimensions of corruption perceptions and underscore that national income can exert a significant influence on the relationship between governance and corruption perceptions in certain dimensions. However, this impact is not uniform across all aspects, indicating that IPC is only one aspect of the complex puzzle between governance and corruption. This research provides valuable insights into the nuanced relationship between governance, corruption, and national income and underscores the need for a comprehensive approach to tackling corruption.

This study provides valuable insights into the complex interplay between various governance factors and their impacts on people's perceptions of corruption. The research findings emphasize the critical importance of promoting transparency and accountability in government, streamlining bureaucratic procedures, enacting robust regulations, upholding the rule of law, and implementing targeted anti-corruption measures to combat the problem effectively. This study further highlights the need for additional research to explore the complex relationship between political stability and corruption. This relationship is not fully understood, and the research results do not align with existing literature or expected outcomes. Further investigation is necessary to clarify the factors that influence the relationship between political stability and corruption.

The relationship between governance and corruption perception is complicated and is affected by a variety of factors. One factor that plays a role is national income per capita. However, the impact of this factor is not uniform across all the dimensions of governance. Some aspects of governance and corruption perception are influenced more by national income per capita than others. These findings suggest that corruption perceptions are complex and multifaceted and that they cannot be easily explained by any factor alone. Instead, a tailored approach that considers the specific contextual factors that are at play is needed. This means that policymakers must be aware of the diverse impact of national income per capita on different dimensions of governance to design effective interventions. Ultimately, a comprehensive approach is essential to enhance public governance. This approach should recognize the intricate nature of corruption perceptions and the importance of addressing specific contextual factors. By doing so, policymakers can better understand the complex relationship between governance and corruption perception and work towards creating more transparent and accountable public institutions.

8. Implications

8.1. Policy implications

Governments and international organizations must prioritize the improvement of public governance structures. This involves working collaboratively to foster citizen participation and accountability, ensuring political stability, enhancing government effectiveness, improving the quality of regulations, upholding the rule of law, and intensifying efforts to control corruption. It is crucial to note that each governance dimension plays a pivotal role in reducing corruption levels, and therefore, a comprehensive approach to governance reform is necessary. The study's findings emphasize the need for a thorough consideration of all governance dimensions to achieve successful governance reform.

The difference in the effect of income per capita on governance and corruption perception is a critical issue that demands attention. The findings indicate that economic contexts are crucial in shaping the impact of income on governance and corruption. Wealthy nations have access to more resources, which they can use to implement stronger rule of law and anti-corruption measures. This enables them to reinforce these areas and promote good governance practices. On the other hand, lower-income countries face significant challenges as they lack the necessary resources to implement such measures. Therefore, they need to focus on building basic governance structures that can support effective anti-corruption efforts, even with limited resources. This approach will help level the playing field and promote fair and equitable development across all nations.

The correlation between good governance and the public's perception of corruption is of utmost importance. It implies that investing in public service infrastructure could provide a viable solution to combat corruption. By enhancing the delivery of services, it becomes possible to minimize the opportunities for corrupt practices to take place. This is achieved by reducing the discretion of public officials and promoting transparency in government operations to lessen the chances of corruption. With better governance, it becomes easier to build trust and confidence in public institutions, leading to increased accountability and a more robust democracy. Overall, good governance is critical to ensuring a fair and just society that meets the needs of its citizens.

The results of the research reveal the vital role of international cooperation in the ongoing battle against corruption. The findings underscore the need for multilateral organizations and governments to work together, exchange ideas, and provide technical support to one another. This collaborative effort is essential to facilitate building capacity in governance and anti-corruption measures across nations. By sharing knowledge and expertise, we can develop effective strategies and solutions to combat corruption, not just within individual countries but on a global scale. This concerted effort will enable us to tackle corruption head-on and create a fairer world for everyone.

8.2. Recommendations for policymakers

To ensure effective governance, policymakers must initiate a wide-ranging set of reforms that tackle all the relevant aspects. These reforms should be focused on promoting transparency, accountability, and public participation in governance processes. By doing so, policymakers can ensure that they can create a governance system that is fair, efficient, and trusted by the public.

Economic policies must be designed with due consideration to the specific governance-corruption dynamics prevailing in each country. This involves carefully adapting anti-corruption strategies to the economic and social realities of different nations, with a particular emphasis on bolstering the rule of law and governance effectiveness in higher-income contexts. By doing so, policymakers can ensure that economic policies are more equitable and effective and that they contribute to the overall well-being of citizens.

In order to effectively combat corruption, it is imperative to fortify the legal systems that underpin anti-corruption efforts. This involves the implementation of stringent anti-corruption laws that are designed to prevent, detect, and punish corrupt practices. Additionally, it is essential to ensure the independence of the judiciary so that any cases of corruption can be fairly and impartially adjudicated. Finally, robust mechanisms must be put in place to enforce anti-corruption laws and hold perpetrators accountable for their actions. By strengthening legal frameworks in this way, we can promote transparency, accountability, and ethical behavior and help to create a more just and equitable society for all.

Fostering public engagement and civil society participation in governance processes is crucial for promoting transparency and accountability in government operations. One of the most effective ways to achieve this is by establishing open communication channels between governments, citizens, and civil society organizations. This will enable the public to play an active role in monitoring government activities, providing feedback, and advocating for necessary reforms. In doing so, governments can demonstrate their commitment to democratic values and create a more inclusive and responsive governance system that meets the needs of all citizens.

The study has provided a comprehensive analysis of the intricate relationship between public governance, national income, and corruption perception. The findings of the research have revealed valuable insights into the complex interplay between these critical factors. The study highlights the importance of adopting a nuanced approach to combat corruption effectively. Policymakers can make a significant contribution to the fight against corruption by implementing tailored economic strategies, comprehensive governance reforms, and fostering international cooperation. By adopting these measures, policymakers can create a more just and equitable society free from the scourge of corruption.

9. Limitations and suggestions

9.1. Limitations of the study

A notable weakness of the study emerges from the inherent nature of the Corruption Perception Index (CPI) as a perception-based measure. This aspect necessitates a thorough acknowledgment of the limitations that arise due to the CPI's reliance on perceptions rather than objective data. First and foremost, the perception of corruption is significantly influenced by cultural, legal, and customary thresholds, which vary across different contexts (Svensson, 2005). This variability suggests that what is considered corrupt in one country may be perceived differently in another, thereby introducing a layer of complexity in interpreting the CPI scores across diverse governance systems. Furthermore, the subjective selection of components that constitute the CPI raises questions about the index's comprehensiveness and representativeness (Treisman, 2007). The methodology behind the CPI involves aggregating various sources that measure the perception of corruption, which can lead to selectivity and subjectivity in the data included. Such selectivity potentially overlooks aspects of corruption that are less visible or not covered by the selected sources, thus limiting the CPI's ability to provide a holistic view of corruption levels. Lastly, the potential bias stemming from business perspectives, as highlighted by Rohwer and Hülsewig (2009), further compounds the CPI's limitations. Since some of the sources used in the CPI are business-oriented surveys, there is a risk that the index disproportionately reflects the experiences and perceptions of the business community. This focus might neglect the experiences of other segments of society, such as the general public or non-profit organizations, leading to a skewed representation of corruption that does not fully capture its multifaceted nature.

The Worldwide Governance Indicators (WGIs) developed by the World Bank are widely used in public governance research to measure governance quality across different countries. The indicators cover six dimensions and offer a comprehensive overview of governance quality. However, there are limitations to using the WGIs in research. One major concern is the methodological limitation related to data aggregation from various sources, which may lead to comparability and bias issues (Langbein & Knack, 2010). Additionally, subjective assessments for governance perceptions may be influenced by transient events or media, potentially skewing the indicators (AlShiab et al., 2020). The WGIs also face limitations in terms of temporal and spatial coverage, with inconsistencies and data gaps presenting obstacles for comprehensive longitudinal and cross-sectional governance analysis. Researchers must also distinguish between correlation and causality in the WGIs' data to avoid misinterpreting the relationship between governance quality and socio-economic outcomes (AlShiab et al., 2020). Lastly, while the WGIs can highlight governance deficiencies, they do not offer targeted policy recommendations, which limits their usefulness in formulating specific governance improvement strategies. Despite these limitations, the WGIs offer valuable insights into the comparative study of public governance when researchers adopt a careful and rigorous approach. Researchers need to remain mindful of the indicators' constraints and supplement their analyses with qualitative data where necessary.

Our research employed a methodological framework that integrated Generalized Estimating Equations (GEE) to investigate the relationship between governance indicators and corruption perceptions. However, during the analysis, we encountered a significant limitation due to the presence of multicollinearity among independent variables. This phenomenon is a common challenge in complex econometric analyses that occurs when two or more independent variables are highly correlated, leading to unstable coefficients and inaccurate estimates. In our case, multicollinearity could potentially influence the interpretation of the contribution of governance indicators to corruption perceptions, affecting the accuracy of our results. Hence, we acknowledge that the findings of our study should be interpreted with care, given the potential impact of multicollinearity on our estimates.

Despite our best efforts to account for it through our methodology, our study has encountered a significant limitation in the form of reverse causality and endogeneity. The issue stems from the fact that the relationship between governance quality and corruption perception is bi-directional, which means that it's challenging to determine which variable causes the other. In other words, corruption perception can influence governance quality, and governance quality can also influence corruption perception. This complexity makes it challenging to draw definitive conclusions from our findings, and the relationship between these two variables may be more intricate than we previously understood.

The study's primary focus is on the relationship between public governance and corruption perception and how national income per capita acts as a mediator. However, this study may have overlooked other important variables that could also affect this relationship. For example, education level, cultural differences, and international aid and sanctions are significant factors that can influence the relationship between public governance and corruption perception. Studies indicate that national culture (national level) and a firm's characteristics (firm level) affect its strategic orientation (Handoyo, Mulyani, et al., 2023; Handoyo, Suharman, et al., 2023). Since each country has a unique culture and characteristics, it may also affect public governance and corruption practices. Therefore, is crucial to consider these mediating variables, along with national income per capita, to gain a more comprehensive understanding of this relationship. By doing so, we can develop a more nuanced understanding of the dynamics between public governance and corruption perception and devise effective strategies to address corruption.

Over ten years, a comprehensive study encompassing a wide range of countries has been conducted. This study aims to shed light on the governance and corruption practices that exist around the world. The study's findings are significant in providing valuable insights into these practices. However, it is important to note that these practices are complex and constantly evolving, which makes it challenging to comprehend their impact fully. Therefore, it may be necessary to conduct more detailed and context-specific analyses to gain a complete understanding of these practices. Furthermore, the temporal scope of the study may not be sufficient to capture long-term trends or the effects of recent policy changes, highlighting the need for continuous research in this area.

Governance and corruption are two complex and intertwined issues that require comprehensive analysis to be fully understood. While quantitative analysis can provide a broad overview of trends and patterns in governance and corruption, it cannot capture qualitative aspects that are equally important. For instance, it is vital to understand the specific mechanisms through which governance improvements, such as increased transparency or accountability measures, reduce corruption. Corruption perceptions are formed and evolve in complex ways that need to be studied and understood. Therefore, it is crucial to use a combination of quantitative and qualitative tools to gain a deeper understanding of governance and corruption and how they affect different societies. A comprehensive analysis of governance and corruption can help policymakers develop effective strategies to address the root causes of corruption and improve governance systems.

The practice of grouping countries into large regional categories, such as sub-Saharan Africa or the Middle East and North Africa (MENA), can sometimes obscure the significant differences in governance and corruption that exist within these regions. Each region has a unique political, economic, and cultural context that is diverse and complex. These contextual factors may have distinct effects on the studied variables. Consequently, it is essential to consider intra-regional differences when conducting research or analysis in these areas to provide a more accurate and nuanced understanding of these regions.

9.2. Suggestions for future research

The relationship between governance and corruption is a complex and multifaceted topic that requires a thorough exploration. To gain a better understanding of this connection, researchers have various opportunities at their disposal. In order to obtain more insightful results, advanced econometric techniques such as dynamic panel models or structural equation modeling can be utilized. These techniques provide a more comprehensive and nuanced approach to overcome statistical challenges like multicollinearity and endogeneity, resulting in more reliable and accurate findings in future studies. By using these techniques, researchers can gain a better understanding of the intricate relationship between governance and corruption, leading to a more comprehensive and insightful knowledge of this important topic.

In future research, it is recommended to disaggregate the data by income levels, specifically low, middle, and high-income countries as defined by reputable institutions like the World Bank. Undertaking such an analysis would provide a more comprehensive understanding of how income levels may influence the relationship between public governance and the perception of corruption. Notably, this approach could illuminate whether affluent countries exhibit different governance mechanisms that effectively lower corruption perceptions or whether lower-income nations face unique challenges that exacerbate corruption issues. It is essential to emphasize that such an analysis would be invaluable in fostering nuanced insights into the complex dynamics of corruption and public governance. By examining the relationship between income levels, governance mechanisms, and corruption perceptions, we could gain a deeper understanding of the factors that impact corruption at the national level. Ultimately, such an approach could inform policy interventions and guide future research in this critical area.

Conducting longitudinal studies and evaluations is a crucial aspect of understanding the effects of governance reforms and anti-corruption policies. These studies can provide rich insights into the dynamics of governance and how corruption can be prevented and remedied. By examining the impact of specific interventions over time, we can gain a more comprehensive understanding of what works and what doesn't when it comes to promoting good governance and reducing corruption. This knowledge can be used to identify best practices that can be replicated and scaled up to benefit society as a whole. Overall, longitudinal studies and evaluations are an essential tool for both academic researchers and policymakers seeking to create a fairer, more just, and more transparent society.

To gain a deeper and more comprehensive understanding of the various factors that influence corruption perception, future studies could consider expanding the range of mediators being studied. For instance, researchers could investigate how educational attainment and cultural norms towards corruption play a role in shaping such perceptions. Additionally, it may be worthwhile to examine the impact of civil society and the media on governance, as these factors can also have a significant impact on the perception of corruption. By exploring these different aspects, we can gain a more nuanced understanding of the complex and multifaceted nature of corruption perceptions.

To gain a thorough understanding of how governance and corruption interact and evolve, researchers should undertake in-depth studies spanning more than a decade. These studies should also include detailed case studies that consider specific contexts. Examining policy changes and reforms that occur over time can provide an intricate and nuanced understanding of the complex relationship between governance and corruption, including how this relationship transforms and develops over time. By conducting such studies, researchers can identify the factors that influence the relationship between governance and corruption and develop effective strategies to combat corruption and promote good governance.

Qualitative research methods offer a unique perspective for understanding the intricate dynamics between governance and corruption perception. One such method is to conduct interviews with policymakers and citizens, which provides valuable insights into the complex interplay between the two. By gathering and analyzing rich, detailed data on people's subjective experiences and perceptions, we can better understand the mechanisms through which corruption perception affects attitudes towards governance and vice versa. This multifaceted approach allows us to dig beyond the limitations of quantitative data and uncover nuanced insights that can inform more effective anti-corruption policies and interventions. The qualitative data obtained through this method provide a holistic understanding of the issue and can aid in the formulation of evidence-based policies to combat corruption.

By conducting a detailed analysis of the role played by international organizations, foreign direct investment, and global economic trends, we can gain a deeper understanding of how these external factors can significantly shape the nature of governance and corruption within a country. This examination can help identify the underlying factors that lie at the heart of positive and negative developments in these areas and provide valuable insights into potential solutions. By examining the various ways in which these external forces influence a nation's political and economic landscape, we can develop a more nuanced understanding of the challenges it faces and the opportunities it can leverage to drive positive change.

When policymakers want to gain a deeper understanding of governance and anti-corruption efforts in a particular country, they can conduct a more in-depth analysis within specific regions. This approach helps identify the unique dynamics of each country, which can provide insight into the challenges and successes associated with governance and anti-corruption efforts. Using this approach, policymakers can gain more targeted and insightful information that can be used to make informed decisions and improve policies. This can lead to more effective governance and anti-corruption efforts, which can positively impact society.

Author contributions statement

In compliance with the International Committee of Medical Journal Editors (ICMJE) guidelines for defining the role of authors and contributors, we hereby elucidate the contributions of each author to the manuscript titled 'Investigating the Relationship Between Public Governance and the Corruption Perception Index.'

Poppy Sofia Koeswayo

• Affiliation: Faculty of Economics and Business, Universitas Padjadjaran, Bandung, Indonesia

• Contributions: Ms. Koeswayo conceived and designed the study. She was primarily responsible for the interpretation of data and drafting of the manuscript. She also coordinated with the authors and assumed the role of the corresponding author.

• Accountability: Ms. Koeswayo takes responsibility for the integrity and accuracy of the entire work, particularly overseeing the data collection and analysis.

Sofik Handoyo

• Affiliation: Faculty of Economics and Business, Universitas Padjadjaran, Bandung, Indonesia

• Contributions: Mr. Handoyo contributed significantly to the data analysis and interpretation. He also provided intellectual input during the revision of this paper.

• Accountability: Mr. Handoyo is accountable for the data analysis section and ensures methodological rigor.

Dede Abdul Hasyir

• Affiliation: Faculty of Economics and Business, Universitas Padjadjaran, Bandung, Indonesia

• Contributions: Mr. Hasyir conceived the research design and provided critical revisions to the manuscript for intellectual content.

• Accountability: Mr. Hasyir is responsible for the theoretical framework and ensures its relevance and robustness.

Final approval and accountability

All three authors critically reviewed and approved the final version of this manuscript for publication. Furthermore, each author agrees to be accountable for all aspects of the work, ensuring that questions related to the accuracy or integrity of any part of the work are appropriately investigated and resolved. By delineating these roles and responsibilities, we affirm that all the authors listed meet the ICMJE criteria for authorship.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Data availability statement

Data is available upon request.

Additional information

Funding

This research was financially supported by the Faculty of Economics and Business, Universitas Padjadjaran, through FEB Research Grant 2023.