Can Digitalisation and Technological Development Reduce Corruption? Evidence from a Structural Analysis in Ukraine

In the context of Ukraine’s ongoing digital transformation and persistent governance challenges, understanding the role of digitalisation in combating corruption is both timely and essential. As the country intensifies efforts to modernise its public sector and attract international support, digital tools have emerged as critical instruments for enhancing transparency and institutional accountability. This study aims to assess the impact of digitalisation and technological development on corruption processes in Ukraine between 2005 and 2023. The analysis is based on data from the World Bank and the State Statistics Service of Ukraine. Using structural equation modelling and principal component analysis, the study constructs latent indicators for corruption, digitalisation, and technological development, and explores the relationships among these factors through a system of structural equations. Data were standardised, normalised, and tested for robustness and model adequacy using various statistical criteria. The findings reveal a strong inverse relationship between digitalisation and corruption: a one-unit increase in digitalisation reduces the corruption index by 0.646 units. Technological development indirectly contributes to corruption reduction by enhancing digital capacity, with a 1% rise in technological indicators leading to a 0.263-unit increase in digitalisation. Key drivers include ICT infrastructure, research and development expenditure, and innovation activity among enterprises. The model confirms that digital reforms in Ukraine are not only effective in curbing corruption but are also statistically sound and policy-relevant, reinforcing the importance of continued investment in digital governance as a core anti-corruption strategy.