The Dangers of Corruption to the Economy and Human Resources in Indonesia

Abstract

This study investigates the dangers of corruption in Indonesia by raising two important issues in the Indonesian economy, namely unemployment and economic growth, and the impact or influence of unemployment and economic growth on corruption. This study aims to reflect on forms of corruption from an economic standpoint and look into potential circumstances that could cause an individual to act corruptly and society tolerating and even supporting such behaviors. We used secondary data from the World Bank and Transparency International with a 30-year research period conducted from 1990 to 2020 using an autoregressive vector model. We found that unemployment suppresses the growth of corruption and economic growth. Vice versa, economic growth suppresses unemployment and corruption. Corruption encourages unemployment growth and suppresses economic growth in Indonesia. Corruption in Indonesia is very damaging to the economy because it increases unemployment and depresses economic growth. Economic growth is very important for Indonesia because economic growth can provide new jobs to reduce the rate of growth of unemployment and reduce corruption.