Chapter 3: MethodologyThere is an extensive literature and empirical analyzes on economic growth and corruption. Many studies have used similar techniques (Meon and Sekkat, 2005). Corruption is often seen as “greasing” or “grinding” the wheels. Growth rate is often combined with investment and some other economic variables to explain the macroeconomic relationship. Many studies on modern literature such as Barro (1991), Mankiw et al. (1992), Meon and Sekkat (2005) and many others have used cross-national data analysis. However, the panel study offers a number of advantages over time series and cross-national data. Thus, panel data will be used for the analysis where 47 countries in sub-Saharan Africa will be taken into account. However, we will also examine how colonialism played a role in sub-Saharan Africa. In fact, we will divide countries based on their colonial power. The colonial power was mainly Great Britain, France, Portugal, Belgium and Spain. Generally, the same economic variables are used by the authors (Meon and Sekkat, 2005). In this thesis, we will use GDP per capita, investment, openness to trade and corruption. We will form a function for corruption by including the CPI, rule of law, government inefficiency index and political instability index. 3.1 Panel econometrics Panel data are a combination of time series and cross-sections. Panel data is data for different entities and at different time periods. It therefore provides multiple observations and therefore has a number of advantages. Using large datasets for different entities at different times helps increase the degree of freedom. Additionally, this is also useful because it reduces the collinearity of the variables. Basic regression...... middle of paper ...... is in the economy of increasing human capital. Human capital can be increased in the economy through increased population growth and a better educated workforce. Therefore, investment in education will be very helpful in growing an economy.[30] Additionally, if we stick to the endogenous model, it is also important to increase technology over time. However, these are theories based on empirical evidence. Indeed, from the first regression, the coefficient (0.03) that we obtained for investment is positive and significant. This confirms the theoretical analysis since investment is positively linked to the growth rate. This means that higher investment will result in a higher growth rate. Sub-Saharan Africa must therefore increase its investments to develop its economy. The chart below shows a positive relationship between log growth rate and log investment.Chart 2