https://onlinesciencepublishing.com/index.php/ajssh <p>2520-5382</p> Online Science Publishing en-US American Journal of Social Sciences and Humanities 2520-5382 https://onlinesciencepublishing.com/index.php/ajssh/article/view/1704 <p>This study investigates the effects of fiscal policy and corruption on economic growth using panel data analysis. Three panel regression techniques were applied: fixed effects, random effects, and pooled OLS. After evaluating the model performance, the Random Effects model and the Pooled OLS model were selected as the most appropriate for the analysis. The research focuses on four Southern European countries, Spain, Italy, Greece, and Portugal, covering the period from 1995 to 2019. GDP growth was used as the dependent variable, serving as a measure of economic performance. The independent variables included the Corruption Perception Index (CPI) to represent corruption, along with government spending and tax revenue to capture fiscal policy. To examine whether corruption influences the effectiveness of fiscal policy, the model also included interaction terms between CPI and the two fiscal variables. The results showed that a one-unit increase in government spending was associated with a 0.24% decrease in GDP growth, while a one-unit rise in tax revenue corresponded to a 0.26% decline. Conversely, a one-point increase in the CPI score, indicating reduced corruption, was linked to a 0.09% increase in economic growth. These findings were statistically significant. However, the interaction terms between corruption and fiscal policy were not significant, suggesting that corruption did not significantly modify the impact of fiscal measures on economic growth within this sample.</p> Stefanos Samprakos Copyright (c) 2026 2026-01-01 2026-01-01 11 1 1 16 10.55284/ajssh.v11i1.1704