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Corruption: Transcending borders

Author

Listed:
  • Michael Jetter
  • Esteban Alemán Correa
  • Jimena Dávila B
  • Alejandra Montoya Agudelo

Abstract

Is corruption capable of spreading across national borders? This paper uses panel data for 120 countries from 1995 to 2012 to evaluate whether the corruption levels ofneighboring countries, as weighted by the relative joint border length, affects domestic corruption. Including country fixed effects allows us to control for unobservablecountry specifc aspects and our results suggest a positive and statistically signifcant relationship. In general, a ten point increase in the weighted freedom from corruption index of neighboring countries is associated with a one point increase of the domestic freedom from corruption index. This result is robust to a variety of alternative specifcations, such as a GMM estimation or including additional control variables. The proposed effect becomes stronger as income increases and the relationship is only positive for countries with a GDP per capita above US$1,600 (in 2000 US$). For the richest countries, the estimated coe cient rises up to 0:43.

Suggested Citation

  • Michael Jetter & Esteban Alemán Correa & Jimena Dávila B & Alejandra Montoya Agudelo, 2014. "Corruption: Transcending borders," Documentos de Trabajo de Valor Público 10899, Universidad EAFIT.
    • Handle: RePEc:col:000122:010899
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    Cited by:

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    2. Reza Tajaddini & Hassan F. Gholipour, 2018. "Control of Corruption and Luxury Goods Consumption," Kyklos, Wiley Blackwell, vol. 71(4), pages 613-641, November.
    3. Debski, Julia & Jetter, Michael & Mösle, Saskia & Stadelmann, David, 2018. "Gender and corruption: The neglected role of culture," European Journal of Political Economy, Elsevier, vol. 55(C), pages 526-537.
    4. Trung V. Vu, 2021. "Climate, diseases, and the origins of corruption," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 29(4), pages 621-649, October.
    5. Tolu Olarewaju & Jagannadha Pawan Tamvada & Sharin McDowall, 2021. "Generalised Trust and Relation Centrism for Corruption: Evidence from Low- and Middle-Income Countries," Discussion Papers 21-01, Department of Economics, University of Birmingham.
    6. Raymond B. Frempong & David Stadelmann, 2017. "Does Female Education have a Bargaining Effect on Household Welfare? Evidence from Ghana and Uganda," CREMA Working Paper Series 2017-08, Center for Research in Economics, Management and the Arts (CREMA).
    7. Sajad Rahimian, 2021. "Corruption Determinants, Geography, and Model Uncertainty," Papers 2105.12878, arXiv.org.
    8. Daryna Grechyna, 2018. "Shall We Riot Too? The Geographical Neighbor Impact on Political Instability," Kyklos, Wiley Blackwell, vol. 71(4), pages 581-612, November.
    9. Jetter, Michael & Parmeter, Christopher F., 2018. "Sorting through global corruption determinants: Institutions and education matter – Not culture," World Development, Elsevier, vol. 109(C), pages 279-294.
    10. Khalid Sekkat, 2022. "Have you been served, your honor? Yes, thank you, your excellency: the judiciary and political corruption," Constitutional Political Economy, Springer, vol. 33(3), pages 326-353, September.

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    More about this item

    Keywords

    corruption; neighborhood effects; panel data;
    All these keywords.

    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General

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