Localization and corruption : panacea or pandora's box?
AbstractAn extensive literature on the relationship between decentralization (or localization) and corruption has developed in recent years. While some authors argue that there is a positive relationship between decentralization and corruption, others claim that decentralization in fact leads to a reduction in the level of corruption. This important policy question has not yet been laid to rest, since previous empirical work simply uses eclectic regressions and lacks a conceptual framework to discover the root causes of corruption. This paper attempts to fill this void by presenting a framework in identifying the drivers of corruption both conceptually and empirically in order to isolate the role of centralized decision-making on corruption. The following results emerge: 1) For a sample of 30 countries (developing and industrial), corruption is caused by: a lack of service-orientation in the public sector, weak democratic institutions, economic isolation (closed economy), colonial past, internal bureaucratic controls and centralized decision making. 2) Decentralization is found to have a negative impact on corruption, with the effect being stronger in unitary than in federal countries.
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Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 3486.
Date of creation: 01 Jan 2005
Date of revision:
National Governance; Decentralization; Corruption&Anitcorruption Law; Public Sector Corruption&Anticorruption Measures; Pharmaceuticals&Pharmacoeconomics; National Governance; Governance Indicators; Corruption&Anitcorruption Law; Public Sector Corruption&Anticorruption Measures; TF054599-PHRD-KYRGYZ REPUBLIC: WATER MANAGEMENT IMPROVEMENT PROJECT;
Other versions of this item:
- Tugrul Gurgur & Anwar Shah, 2014. "Localization and corruption: panacea or pandora's box?," Annals of Economics and Finance, Society for AEF, vol. 15(1), pages 109-136, May.
- Tugrul Gurgur & Anwar Shah, 2008. "Localization and corruption: panacea or pandora's box?," CEMA Working Papers 581, China Economics and Management Academy, Central University of Finance and Economics.
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-01-16 (All new papers)
- NEP-DEV-2005-01-16 (Development)
- NEP-REG-2005-01-16 (Regulation)
- NEP-URE-2005-01-16 (Urban & Real Estate Economics)
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