Corruption, Income Inequality, and Poverty in the United States
AbstractIn this study we analyze the effects of corruption on income inequality and poverty. Our analysis advances the existing literature in four ways. First, instead of using corruption indices assembled by various investment risk services, we use an objective measure of corruption: the number of public officials convicted in a state for crimes related to corruption. Second, we use all commonly used inequality and poverty measures including various Atkinson indexes, Gini index, standard deviation of the logarithms, relative mean deviation, coefficient of variation, and the poverty rate defined by the U.S. Census Bureau. Third, we minimize the problems which are likely to arise due to data incomparability by examining the differences in income inequality, and poverty across U.S. states. Finally, we exploit both time series and cross sectional variation in the data. We find robust evidence that an increase in corruption increases income inequality and poverty.
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Bibliographic InfoPaper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 2008.54.
Date of creation: Aug 2008
Date of revision:
Corruption; Income Inequality; Poverty;
Find related papers by JEL classification:
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
- I32 - Health, Education, and Welfare - - Welfare and Poverty - - - Measurement and Analysis of Poverty
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- Marco Pani, 2011. "Hold your nose and vote: corruption and public decisions in a representative democracy," Public Choice, Springer, vol. 148(1), pages 163-196, July.
- Nicholas Apergis & Oguzhan Dincer & James Payne, 2010. "The relationship between corruption and income inequality in U.S. states: evidence from a panel cointegration and error correction model," Public Choice, Springer, vol. 145(1), pages 125-135, October.
- Dobson, Stephen & Ramlogan-Dobson, Carlyn, 2012. "Why is Corruption Less Harmful to Income Inequality in Latin America?," World Development, Elsevier, vol. 40(8), pages 1534-1545.
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