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Corruption Epidemics

Author

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  • 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.

Suggested Citation

  • Becker, Sascha & Egger, Peter H & Seidel, Tobias, 2008. "Corruption Epidemics," Stirling Economics Discussion Papers 2008-09, University of Stirling, Division of Economics.
    • Handle: RePEc:stl:stledp:2008-09
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    File URL: http://hdl.handle.net/1893/508
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    Cited by:

    1. Hathroubi, Salem, 2013. "Epidemic corruption: a bio-economic homology," EconStor Preprints 73558, ZBW - Leibniz Information Centre for Economics.
    2. Raffaella Barone & Donato Masciandaro & Friedrich Schneider, 2022. "Corruption and money laundering: You scratch my back, i’ll scratch yours," Metroeconomica, Wiley Blackwell, vol. 73(1), pages 318-342, February.

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    Keywords

    Perceived corruption; Institutions; Spatial econometrics;
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