Macroeconomic Analysis of Corruption in Developing Economies
AbstractBased on empirical data, a two-equation game-type corruption reaction function model was developed. A “data to model” approach was used rather than the usual a priori approach. The general hypothesis tested was the “monkey see, monkey do” principle. The latest data on corruption among developing countries was obtained from the Enterprise Surveys done by the World Bank Group in 2010. The key variables were the percent of domestic firms expecting to make informal payment to public officials to “get things done,” and the percent of foreign firms doing like wise. The time span is from 2002-2010. A variety of econometric methods were used. In general, the statistical results were quite good and supported the hypothesis. Both reaction equations were positively sloped. Time had a reducing effect on the frequency of domestic corruption, yet it had an increasing effect on foreign corruption. Variations in the frequency of corruption across regions of countries were generally not significant.
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Bibliographic InfoPaper provided by University of Utah, Department of Economics in its series Working Paper Series, Department of Economics, University of Utah with number 2011_02.
Length: 14 pages
Date of creation: 2011
Date of revision:
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Firm; Corruption; Game Model; Developing Countries JEL Classification: C51; D81; E60; K49; M29;
Find related papers by JEL classification:
- Dev - Microeconomics - - - - -
- Cou - Mathematical and Quantitative Methods - - - - -
- JEL - Labor and Demographic Economics - - - - -
- Cla - Mathematical and Quantitative Methods - - - - -
- C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
- E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
- K49 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Other
- M29 - Business Administration and Business Economics; Marketing; Accounting - - Business Economics - - - Other
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-02-26 (All new papers)
- NEP-DEV-2011-02-26 (Development)
- NEP-LAM-2011-02-26 (Central & South America)
- NEP-LAW-2011-02-26 (Law & Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Reinikka, Ritva & Svensson, Jakob, 2006. "Using Micro-Surveys to Measure and Explain Corruption," World Development, Elsevier, vol. 34(2), pages 359-370, February.
- Méon, Pierre-Guillaume & Weill, Laurent, 2010.
"Is Corruption an Efficient Grease?,"
Elsevier, vol. 38(3), pages 244-259, March.
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- Pierre-Guillaume Méon & Laurent Weill, 2008. "Is Corruption an Efficient Grease ?," Working Papers of LaRGE Research Center 2008-06, Laboratoire de Recherche en Gestion et Economie (LaRGE), Université de Strasbourg.
- Pierre-Guillaume Méon & Laurent Weill, 2010. "Is corruption an efficient grease?," ULB Institutional Repository 2013/92603, ULB -- Universite Libre de Bruxelles.
- Méon, Pierre-Guillaume & Weill, Laurent, 2008. "Is corruption an efficient grease?," BOFIT Discussion Papers 20/2008, Bank of Finland, Institute for Economies in Transition.
- Menezes, Flavio Marques, 2000. "The Microeconomics of Corruption: The Classical Approach," Economics Working Papers (Ensaios Economicos da EPGE) 405, FGV/EPGE Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
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