Investigating the political and regulatory context of corruption and foreign direct investment in post-soviet countries

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Abstract

This article considers the ongoing academic debate surrounding the impact of corruption on investments (Lestari et al., 2022). The aim of the study is to analyze the relationship between corruption and foreign direct investment (FDI) inflow in post-Soviet countries and to examine anti-corruption-related factors influencing investment activity. The investigation employs quantitative and qualitative research methods. The authors analyze secondary data from the World Bank (WB) and Transparency International (TI), examining the dynamics of FDI as well as the corruption perceptions index (CPI) for 15 post-Soviet countries from 2013 to 2022. Upon computing Pearson’s correlation coefficients, no significant association between these two indicators was found. In this regard, the authors assumed that the inelastic demand for specific resources in developing nations outweighs the discouraging effect of corruption. These observations correspond to the findings of Abdella et al. (2018). Furthermore, instances of notable fluctuations in CPI rankings accompanied by significant FDI growth were examined, with a focus on the associated political and regulatory context. To explore this, the authors analyze “gray literature” from 2013 to 2022, highlighting significant events within countries. Findings establish a cause-and-effect relationship between these events, the changes in CPI, and FDI.

Keywords: Anticorruption Policy, Corruption Perception, Post-Soviet, Investment Attraction, Foreign Direct Investment, Private Investments

Authors’ individual contribution: Conceptualization — B.B. and A.Z.; Methodology — B.B., A.Z., and Z.D.; Investigation — A.Z. and Z.D.; Writing — Original Draft — B.B. and A.Z.; Writing — Review & Editing — M.N.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: D73, G11, K23

Received: 23.02.2024
Accepted: 30.09.2024
Published online: 03.10.2024

How to cite this paper: Bokayev, B., Zagrebin, A., Davletbayeva, Z., & Nauryzbek, M. (2024). Investigating the political and regulatory context of corruption and foreign direct investment in post-Soviet countries. Journal of Governance & Regulation, 13(4), 83–92. https://doi.org/10.22495/jgrv13i4art9