Corruption and Infrastructure at the Country and Regional Level
AbstractThis paper examines the relationship between corruption and infrastructure at both the country and regional level using the World Bank’s Enterprise Surveys data. A statistically significant and considerable relationship is established between the measure of corruption in the macro data and the measures of transportation and electricity infrastructure. Countries with more corruption tend to have worse infrastructure in the eyes of their firms. This link is shown to remain when one uses other measures of corruption and after controlling for GDP per capita, institutional quality and land area. At the regional level, the key result is unchanged. The magnitude and significance of this result is shown to vary by global region. Two stage least squares results, using distance from the equator as an instrument at the macro level support the simple OLS results and allow us to have some confidence that the causality runs from corruption to infrastructure. Finally, it is shown that within country variation in corruption has a significant effect on regional infrastructure.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 46679.
Date of creation: 12 Apr 2013
Date of revision:
Corruption; infrastructure; cross country; regional variation;
Find related papers by JEL classification:
- D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
- H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
- O18 - Economic Development, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-05-11 (All new papers)
- NEP-GEO-2013-05-11 (Economic Geography)
- NEP-PBE-2013-05-11 (Public Economics)
- NEP-TRE-2013-05-11 (Transport Economics)
- NEP-URE-2013-05-11 (Urban & Real Estate Economics)
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