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Corruption Around The World: Evidence From A Structural Model

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Author Info
Axel Dreher (University of Exeter)
Christos Kotsogiannis (University of Exeter)
Steve McCorriston (University of Exeter)

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Abstract

The causes and consequences of corruption have attracted much attention in recent years by both academics and policy makers. Central in the discussion on the impact of corruption are perception-based indices. While informative, these indices are ordinal in nature and hence provide no indication of how much economic loss is attributed to corruption. Arguably, this shortcoming is rooted in the lack of a structural model. This is the issue addressed in this paper. By treating corruption as a latent variable that is directly related to its underlying causes, a cardinal index of corruption is derived for approximately 100 countries. This allows us to compute a measure of the losses due to corruption as a percentage of GDP per capita.

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Paper provided by EconWPA in its series Public Economics with number 0406004.

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Date of creation: 08 Jun 2004
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Handle: RePEc:wpa:wuwppe:0406004

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Related research
Keywords: Corruption; Latent Variables; Economic Development; Rule of Law;

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Find related papers by JEL classification:
H10 - Public Economics - - Structure and Scope of Government - - - General
O1 - Economic Development, Technological Change, and Growth - - Economic Development
K49 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Other
C39 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Other

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References listed on IDEAS
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Full references

Cited by:
(explanations, 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.)

  1. repec:bep:eapadv:v:6:y:2006:i:1:p:1545-1545 is not listed on IDEAS
  2. Lars Siemers & Axel Dreher, 2005. "The Intriguing Nexus between Corruption and Capital Account Restrictions," RWI Discussion Papers 0035, Rheinisch-Westfälisches Institut für Wirtschaftsforschung. [Downloadable!]
    Other versions:
  3. Axel Dreher & Friedrich Schneider, 2006. "Corruption and the Shadow Economy: An Empirical Analysis," CREMA Working Paper Series 2006-01, Center for Research in Economics, Management and the Arts (CREMA). [Downloadable!]
    Other versions:
  4. Friedrich Schneider, 2006. "Shadow Economies and Corruption all over the World: What do we really Know?," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
  5. Keith Blackburn & Kyriakos C. Neanidis & M. Emranul Haque, 2008. "Corruption, Seigniorage and Growth: Theory and Evidence," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  6. Axel Dreher & Thomas Herzfeld, 2005. "The Economic Costs of Corruption: A Survey and New Evidence," Public Economics 0506001, EconWPA. [Downloadable!]
  7. Méon, Pierre-Guillaume & Weill, Laurent, 2008. "Is corruption an efficient grease?," BOFIT Discussion Papers 20/2008, Bank of Finland, Institute for Economies in Transition. [Downloadable!]
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  8. Keith Blackburn & Kyriakos C. Neanidis & M. Emranul Haque, 2008. "Comparing Seasonal Forecasts of Industrial Production," Centre for Growth and Business Cycle Research Discussion Paper Series 103, Economics, The Univeristy of Manchester. [Downloadable!]
  9. Schneider, Friedrich, 2007. "Shadow Economies and Corruption All Over the World: New Estimates for 145 Countries," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy, vol. 1(9), pages 1-66. [Downloadable!]
  10. Michele Berardi, 2008. "Fundamentalists vs. chartists: learning and predictor choice dynamics," Centre for Growth and Business Cycle Research Discussion Paper Series 104, Economics, The Univeristy of Manchester. [Downloadable!]
  11. Kira Boerner & Christa Hainz, 2007. "The Political Economy of Corruption & the Role of Financial Institutions," William Davidson Institute Working Papers Series wp892, William Davidson Institute at the University of Michigan Stephen M. Ross Business School. [Downloadable!]
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