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Corruption Epidemics

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Author Info

  • Becker, Sascha
  • Egger, Peter H
  • Seidel, Tobias

Abstract

When estimating the determinants of perceived corruption, economists assumed that there is full independence across countries. In the presence of peer-group or learning effects through cross-border economic activity (such as trade or labor migration), this assumption might be violated. We provide evidence that this is the case. Using a cross-section of 123 economies for the year 2000, we illustrate that corruption in one country spills over to adjacent economies. This finding implies that institutional changes reducing corruption in one country lead to smaller but qualitatively similar effects in neighboring countries.

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File URL: http://hdl.handle.net/1893/508
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Bibliographic Info

Paper provided by University of Stirling, Division of Economics in its series Stirling Economics Discussion Papers with number 2008-09.

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Date of creation: Jun 2008
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Handle: RePEc:stl:stledp:2008-09

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Postal: Division of Economics, University of Stirling, Stirling, Scotland FK9 4LA
Phone: +44 (0)1786 467473
Fax: +44 (0)1786 467469
Web page: http://www.econ.stir.ac.uk/
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Keywords: Perceived corruption; Institutions; Spatial econometrics;

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References

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  1. Levine, Ross & Renelt, David, 1992. "A Sensitivity Analysis of Cross-Country Growth Regressions," American Economic Review, American Economic Association, vol. 82(4), pages 942-63, September.
  2. Naci Mocan, 2008. "What Determines Corruption? International Evidence From Microdata," Economic Inquiry, Western Economic Association International, vol. 46(4), pages 493-510, October.
  3. Andvig, J.C. & Ove Moene, K., 1988. "How Corruption May Corrupt," Memorandum 20/1988, Oslo University, Department of Economics.
  4. Danila Serra, 2006. "Empirical determinants of corruption: A sensitivity analysis," Public Choice, Springer, vol. 126(1), pages 225-256, January.
  5. Kelejian, Harry H & Prucha, Ingmar R, 1999. "A Generalized Moments Estimator for the Autoregressive Parameter in a Spatial Model," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 40(2), pages 509-33, May.
  6. Andrei Shleifer & Robert W. Vishny, 1998. "The Quality of Government," Harvard Institute of Economic Research Working Papers 1847, Harvard - Institute of Economic Research.
  7. Herzfeld, Thomas & Weiss, Christoph, 2003. "Corruption and legal (in)effectiveness: an empirical investigation," European Journal of Political Economy, Elsevier, vol. 19(3), pages 621-632, September.
  8. Mauro, Paolo, 1998. "Corruption and the composition of government expenditure," Journal of Public Economics, Elsevier, vol. 69(2), pages 263-279, June.
  9. Xavier X. Sala-i-Martin, 1997. "I Just Ran Four Million Regressions," NBER Working Papers 6252, National Bureau of Economic Research, Inc.
  10. Meseguer, Covadonga, 2006. "Learning and economic policy choices," European Journal of Political Economy, Elsevier, vol. 22(1), pages 156-178, March.
  11. Feichtinger, Gustav & Wirl, Franz, 1994. "On the stability and potential cyclicity of corruption in governments subject to popularity constraints," Mathematical Social Sciences, Elsevier, vol. 28(2), pages 113-131, October.
  12. Paldam, Martin, 2001. "Corruption and Religion Adding to the Economic Model," Kyklos, Wiley Blackwell, vol. 54(2-3), pages 383-413.
  13. Treisman, Daniel, 2000. "The causes of corruption: a cross-national study," Journal of Public Economics, Elsevier, vol. 76(3), pages 399-457, June.
  14. Teodora Erika Uberti & Maria Francesca Cracolici, 2008. "Geographical Distribution of Crime in Italian Provinces: A Spatial Econometric Analysis," Working Papers 2008.11, Fondazione Eni Enrico Mattei.
  15. Kelejian, Harry H. & Prucha, Ingmar R., 2007. "HAC estimation in a spatial framework," Journal of Econometrics, Elsevier, vol. 140(1), pages 131-154, September.
  16. Herbert Dawid & Gustav Feichtinger, 1996. "On the persistence of corruption," Journal of Economics, Springer, vol. 64(2), pages 177-193, June.
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Cited by:
  1. Hathroubi, Salem, 2013. "Epidemic corruption: a bio-economic homology," EconStor Preprints 73558, ZBW - German National Library of Economics.

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