Final Year Project

Project Title

When Trust Erodes: Corruption, Social Capital, and Foreign Investment in Pakistan

Description

This research examines how corruption erodes institutional trust in Pakistan and how that erosion shapes foreign direct investment inflows from 2001 to 2023. Using a mixed-methods approach combining three OLS regression models in STATA and R with thematic analysis of expert interviews, the study finds that every one-point improvement in Pakistan's corruption index corresponds to a 0.56-point increase in institutional trust, and each unit increase in trust corresponds to $2.48 billion in additional FDI inflows. The research establishes institutional trust as the key mediating variable between corruption and foreign investment, arguing that anti-corruption efforts alone are insufficient without rebuilding public confidence in institutions. Selected as the official entry to the International Social Capital Association's Conference, Dubai 2026.