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Does corruption affect income inequality and poverty?

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Author Info
Sanjeev Gupta
Hamid Davoodi
Rosa Alonso-Terme
Abstract

This paper provides evidence that high and rising corruption increases income inequality and poverty. An increase of one standard deviation in corruption increases the Gini coefficient of income inequality by about 11 points and income growth of the poor by about 5 percentage points per year. These findings are robust to use of different instruments for corruption and other sensitivity analyses. The paper discusses several channels through which corruption may affect income inequality and poverty. An important implication of these findings is that policies that reduce corruption will most likely reduce income inequality and poverty as well. Copyright Springer-Verlag Berlin Heidelberg 2002

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File URL: http://hdl.handle.net/10.1007/s101010100039
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Publisher Info
Article provided by Springer in its journal Economics of Governance.

Volume (Year): 3 (2002)
Issue (Month): 1 (03)
Pages: 23-45
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Handle: RePEc:spr:ecogov:v:3:y:2002:i:1:p:23-45

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Related research
Keywords: Key words: Corruption; income inequality; poverty; JEL Classification: D73; D31; I32;

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This page was last updated on 2009-11-21.

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