IDEAS home Printed from https://ideas.repec.org/a/eee/ecolet/v136y2015icp218-222.html
   My bibliography  Save this article

Governmental decentralization and corruption revisited: Accounting for potential endogeneity

Author

Listed:
  • Choudhury, Sanchari

Abstract

The causal effect of governmental decentralization on firm-level corruption is inconclusive due to the difficulty in obtaining a traditional instrumental variable. Circumventing the issue by using the Lewbel (2012) identification strategy, we find mild evidence of political decentralization being endogenous but no support for fiscal decentralization being endogenous.

Suggested Citation

  • Choudhury, Sanchari, 2015. "Governmental decentralization and corruption revisited: Accounting for potential endogeneity," Economics Letters, Elsevier, vol. 136(C), pages 218-222.
    • Handle: RePEc:eee:ecolet:v:136:y:2015:i:c:p:218-222
    DOI: 10.1016/j.econlet.2015.09.040
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0165176515003985
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.econlet.2015.09.040?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Arthur Lewbel, 2012. "Using Heteroscedasticity to Identify and Estimate Mismeasured and Endogenous Regressor Models," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 30(1), pages 67-80.
    2. Razafindrakoto, Mireille & Roubaud, François, 2010. "Are International Databases on Corruption Reliable? A Comparison of Expert Opinion Surveys and Household Surveys in Sub-Saharan Africa," World Development, Elsevier, vol. 38(8), pages 1057-1069, August.
    3. Thanh Thuy Vu & Messaoud Zouikri & Bruno Deffains, 2014. "The Interrelationship between Formal and Informal Decentralization and Its Impact on Subcentral Governance Performance: the Case of Vietnam," CESifo Economic Studies, CESifo Group, vol. 60(3), pages 613-652.
    4. Brennan,Geoffrey & Buchanan,James M., 2006. "The Power to Tax," Cambridge Books, Cambridge University Press, number 9780521027922.
    5. Grossman, Guy & Lewis, Janet I., 2014. "Administrative Unit Proliferation," American Political Science Review, Cambridge University Press, vol. 108(1), pages 196-217, February.
    6. Fan, C. Simon & Lin, Chen & Treisman, Daniel, 2009. "Political decentralization and corruption: Evidence from around the world," Journal of Public Economics, Elsevier, vol. 93(1-2), pages 14-34, February.
    7. Dilyan Donchev & Gergely Ujhelyi, 2014. "What Do Corruption Indices Measure?," Economics and Politics, Wiley Blackwell, vol. 26(2), pages 309-331, July.
    8. Maksym Ivanyna & Anwar Shah, 2011. "Decentralization and Corruption: New Cross-Country Evidence," Environment and Planning C, , vol. 29(2), pages 344-362, April.
    9. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64, pages 416-416.
    10. Cai, Hongbin & Treisman, Daniel, 2004. "State corroding federalism," Journal of Public Economics, Elsevier, vol. 88(3-4), pages 819-843, March.
    11. repec:dau:papers:123456789/4352 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sanchari Choudhury, 2021. "Regulation and Corruption: Evidence from the United States," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 83(4), pages 897-934, August.
    2. Timothy Tyler Brown & Vishnu Murthy, 2020. "Do public health activities pay for themselves? The effect of county‐level public health expenditures on county‐level public assistance medical care benefits in California," Health Economics, John Wiley & Sons, Ltd., vol. 29(10), pages 1220-1230, October.
    3. Kassouri, Yacouba, 2022. "Fiscal decentralization and public budgets for energy RD&D: A race to the bottom?," Energy Policy, Elsevier, vol. 161(C).
    4. Choudhury, Sanchari, 2023. "Non-random selection into entrepreneurship in the realm of government decentralization and corruption," European Journal of Political Economy, Elsevier, vol. 78(C).
    5. François, Abel & Méon, Pierre-Guillaume, 2021. "Politicians at higher levels of government are perceived as more corrupt," European Journal of Political Economy, Elsevier, vol. 67(C).
    6. Choudhury, Sanchari, 2019. "WTO membership and corruption," European Journal of Political Economy, Elsevier, vol. 60(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jorge Martinez-Vazquez & Santiago Lago-Peñas & Agnese Sacchi, 2017. "The Impact Of Fiscal Decentralization: A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 31(4), pages 1095-1129, September.
    2. Erman,Alvina Elisabeth & Solis Uehara,Carla Cristina & Beaudet,Chloé, 2021. "Leveling Up : Impacts of Performance-Based Grants on Municipal Revenue Collection in Mozambique," Policy Research Working Paper Series 9789, The World Bank.
    3. Antonio Farfan-Vallespin, 2012. "Decentralization as Unbundling of Public Goods Provision - New Effects of Decentralization on Efficiency and Electoral Control," Discussion Paper Series 21, Department of International Economic Policy, University of Freiburg, revised Nov 2012.
    4. Nadia Fiorino & Emma Galli & Fabio Padovano, 2013. "Do fiscal decentralization and government fragmentation affect corruption in different ways? Evidence from a panel data analysis," Chapters, in: Santiago Lago-Peñas & Jorge Martinez-Vazquez (ed.), The Challenge of Local Government Size, chapter 5, pages 121-147, Edward Elgar Publishing.
    5. Evgeny Yakovlev & Ekaterina Zhuravskaya, 2006. "State Capture in a Federation," Working Papers w0093, Center for Economic and Financial Research (CEFIR).
    6. Nadia Fiorino & Emma Galli & Fabio Padovano, 2015. "How long does it take for government decentralization to affect corruption?," Economics of Governance, Springer, vol. 16(3), pages 273-305, August.
    7. Laarni Escresa & Lucio Picci, 2020. "The determinants of cross-border corruption," Public Choice, Springer, vol. 184(3), pages 351-378, September.
    8. Andreas P. Kyriacou & Leonel Muinelo-Gallo & Oriol Roca-Sagalés, 2015. "Regional inequalities, fiscal decentralization and government quality: empirical evidence from simultaneous equations," Working Papers. Collection A: Public economics, governance and decentralization 1501, Universidade de Vigo, GEN - Governance and Economics research Network.
    9. Jia, Junxue & Liang, Xuan & Ma, Guangrong, 2021. "Political hierarchy and regional economic development: Evidence from a spatial discontinuity in China," Journal of Public Economics, Elsevier, vol. 194(C).
    10. Carmelo León & Jorge Araña & Javier León, 2013. "Correcting for Scale Perception Bias in Measuring Corruption: an Application to Chile and Spain," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 114(3), pages 977-995, December.
    11. Keith Blackburn & Gareth Downing, 2015. "Deconcentration, Corruption and Economic Growth," Centre for Growth and Business Cycle Research Discussion Paper Series 209, Economics, The University of Manchester.
    12. Robert Gillanders & Sinikka Parviainen, 2018. "Corruption and the shadow economy at the regional level," Review of Development Economics, Wiley Blackwell, vol. 22(4), pages 1729-1743, November.
    13. Boadway, Robin & Tremblay, Jean-François, 2012. "Reassessment of the Tiebout model," Journal of Public Economics, Elsevier, vol. 96(11), pages 1063-1078.
    14. Michael A. Nelson, 2013. "Corruption and the size of local governments: are they related?," Chapters, in: Santiago Lago-Peñas & Jorge Martinez-Vazquez (ed.), The Challenge of Local Government Size, chapter 4, pages 83-120, Edward Elgar Publishing.
    15. Longjin Chen & Jian Huang & Jianjun Li, 2017. "Fiscal Decentralization, Satisfaction with Social Services, and Inequality Under the Hukou System," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 132(1), pages 377-394, May.
    16. Pei Li & Yi Lu & Tuan-Heww Sng, 2017. "Artificial Administrative Boundaries: Evidence from China," CEH Discussion Papers 09, Centre for Economic History, Research School of Economics, Australian National University.
    17. Choudhury, Atrayee & Sahu, Sohini, 2022. "Revisiting the nexus between fiscal decentralization and government size - The role of ethnic fragmentation," European Journal of Political Economy, Elsevier, vol. 75(C).
    18. Oto-Peralías, Daniel & Romero-Ávila, Diego & Usabiaga, Carlos, 2013. "Does fiscal decentralization mitigate the adverse effects of corruption on public deficits?," European Journal of Political Economy, Elsevier, vol. 32(C), pages 205-231.
    19. Fan, C. Simon & Lin, Chen & Treisman, Daniel, 2009. "Political decentralization and corruption: Evidence from around the world," Journal of Public Economics, Elsevier, vol. 93(1-2), pages 14-34, February.
    20. Jason Sorens, 2014. "Fiscal federalism, jurisdictional competition, and the size of government," Constitutional Political Economy, Springer, vol. 25(4), pages 354-375, December.

    More about this item

    Keywords

    Corruption; Decentralization; Endogeneity; Heteroskedasticity; Instrumental variables;
    All these keywords.

    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • H10 - Public Economics - - Structure and Scope of Government - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecolet:v:136:y:2015:i:c:p:218-222. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ecolet .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.