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Are larger countries really more corrupt?

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Author Info

  • Knack, Stephen
  • Azfar, Omar

Abstract

Several authors claim to provide evidence that government corruption is less severe in small than in large countries. The authors demonstrate that this relationship is an artifact of sample selection. Most corruption indicators provide ratings only for the countries in which multi-national investors have the greatest interest. These tend to include almost all large nations but, among small nations, only those that are well governed. The authors find that the relationship between corruption and country size disappears when one uses either a new corruption indicator with substantially increased country coverage or an alternative corruption indicator that covers all World Bank borrowers without regard to country size. They also show that the relationship between corruption and trade intensity--a variable strongly related to population--disappears when samples less subject to selection bias are used.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 2470.

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Date of creation: 30 Nov 2000
Date of revision:
Handle: RePEc:wbk:wbrwps:2470

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Related research

Keywords: National Governance; Governance Indicators; Corruption&Anitcorruption Law; Public Sector Corruption&Anticorruption Measures; Poverty Monitoring&Analysis;

References

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  1. Robert E. Hall & Charles I. Jones, 1999. "Why Do Some Countries Produce So Much More Output Per Worker Than Others?," The Quarterly Journal of Economics, MIT Press, vol. 114(1), pages 83-116, February.
  2. Wacziarg, Romain & Alesina, Alberto, 1999. "Is Europe Going Too Far?," Scholarly Articles 4553012, Harvard University Department of Economics.
  3. Alesina, Alberto & Spolaore, Enrico, 1997. "On the Number and Size of Nations," The Quarterly Journal of Economics, MIT Press, vol. 112(4), pages 1027-56, November.
  4. Stephen Knack & Philip Keefer, 1995. "Institutions And Economic Performance: Cross-Country Tests Using Alternative Institutional Measures," Economics and Politics, Wiley Blackwell, vol. 7(3), pages 207-227, November.
  5. David H. Romer & Jeffrey A. Frankel, 1999. "Does Trade Cause Growth?," American Economic Review, American Economic Association, vol. 89(3), pages 379-399, June.
  6. Kaufmann, Daniel & Kraay, Aart & Zoido-Lobaton, Pablo, 1999. "Aggregating governance indicators," Policy Research Working Paper Series 2195, The World Bank.
  7. Rafael Di Tella & Alberto Ades, 1999. "Rents, Competition, and Corruption," American Economic Review, American Economic Association, vol. 89(4), pages 982-993, September.
  8. Easterly, William & Kraay, Aart, 2000. "Small States, Small Problems? Income, Growth, and Volatility in Small States," World Development, Elsevier, vol. 28(11), pages 2013-2027, November.
  9. Fisman, Raymond & Gatti, Roberta, 2002. "Decentralization and corruption: evidence across countries," Journal of Public Economics, Elsevier, vol. 83(3), pages 325-345, March.
  10. Alberto Alesina & Enrico Spolaore & Romain Wacziarg, 1997. "Economic Integration and Political Disintegration," NBER Working Papers 6163, National Bureau of Economic Research, Inc.
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Citations

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Cited by:
  1. William Hallagan, 2010. "Corruption in dictatorships," Economics of Governance, Springer, vol. 11(1), pages 27-49, February.
  2. Frederico Cavazzini & Pedro Picaluga Nevado, 2013. "Fighting corruption with strategy," OBEGEF Working Papers 016, OBEGEF - Observatório de Economia e Gestão de Fraude & OBEGEF Working Papers on Fraud and Corruption.
  3. Tavares, Samia Costa, 2007. "Do rapid political and trade liberalizations increase corruption?," European Journal of Political Economy, Elsevier, vol. 23(4), pages 1053-1076, December.
  4. Danila Serra, 2006. "Empirical determinants of corruption: A sensitivity analysis," Public Choice, Springer, vol. 126(1), pages 225-256, January.
  5. Chi, Wei & Wang, Yijiang, 2008. "Bribe-Taking by Bureaucrats: Personal and Circumstantial Determinants," MPRA Paper 8668, University Library of Munich, Germany.
  6. Kaufmann, Daniel & Kraay, Aart & Zoido-Lobaton, Pablo, 2002. "Governance matters II - updated indicators for 2000-01," Policy Research Working Paper Series 2772, The World Bank.
  7. Islam, Roumeen & Montenegro, Claudio E., 2002. "What determines the quality of institutions?," Policy Research Working Paper Series 2764, The World Bank.
  8. Nicholas Charron & José Fernández-Albertos & Victor Lapuente, 2012. "Small is Different Size, Political Representation and Governance," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1220, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
  9. M. Kent Ranson & Kara Hanson & Valeria Oliveira-Cruz & Anne Mills, 2003. "Constraints to expanding access to health interventions: an empirical analysis and country typology," Journal of International Development, John Wiley & Sons, Ltd., vol. 15(1), pages 15-39.
  10. Ahlfeld, Sebastian & Hemmer, Hans-Rimbert, 2006. "Der Beitrag der Geography vs. Institutions-Debatte zur Erklärung von Good oder Bad Governance," Discussion Papers in Development Economics 35, Justus Liebig University Giessen, Institute for Development Economics.
  11. Jiro Honda, 2008. "Do IMF Programs Improve Economic Governance?," IMF Working Papers 08/114, International Monetary Fund.

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