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Corruption and size decentralization

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  • Antonio Lecuna

    (Universidad del Desarrollo)

Abstract

Statistical tests based on newly collected cross-sectional data suggest that countries which have more first-tier subnational governments relative to their population are more corrupt. I measure the strength of association between “corruption” and the variables “population per regional government” and “average area of first-tier unit,” both individually and combined as the interaction effect “size decentralization,” in 100 randomly selected countries. Two theoretical arguments may explain these associations: (i) the greater the quantity of first-tier subnational units with monopolistic powers, such as legal and regulatory sanctions, the greater the incentives for bribery and extortion; and (ii) elected authorities and public servants of smaller regional governments are more vulnerable to capture by a corrupt private elite, especially when control and accountability mechanisms are weaker than national ones. This paper also provides some support for existing corruption theories, namely that wealthy countries with Protestant societies use democratic systems more effectively to control corruption.

Suggested Citation

  • Antonio Lecuna, 2012. "Corruption and size decentralization," Journal of Applied Economics, Universidad del CEMA, vol. 15, pages 139-168, May.
    • Handle: RePEc:cem:jaecon:v:15:y:2012:n:1:p:139-168
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    File URL: https://ucema.edu.ar/publicaciones/download/volume15/lecuna.pdf
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    Citations

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    Cited by:

    1. Takano, Guillermo, 2017. "Public-Private Partnerships as rent-seeking opportunities: A case study on an unsolicited proposal in Lima, Peru," Utilities Policy, Elsevier, vol. 48(C), pages 184-194.
    2. Antonio Lecuna & Roberto Chávez, 2018. "Entrepreneurship and Weak Institutions in Latin America," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 33(Fall 2018), pages 25-47.
    3. Antonio Lecuna, 2014. "Corruption and bureaucracy in entrepreneurship," Serie Working Papers 17, Universidad del Desarrollo, School of Business and Economics, revised Dec 2014.
    4. Akhmad Samsul Ulum & Abdul Rohman & Puji Harto & Dwi Ratmono & Imam Ghozali, 2019. "The Role of Natural Resources on Moderating the Relationship between Fiscal Decentralization and Corruption: Evidence from Indonesia," International Journal of Energy Economics and Policy, Econjournals, vol. 9(1), pages 67-75.
    5. Muhammad Syauqi Qur’ani Putra Ariva & Ermawati, 2020. "Determinants Influencing the Level of Corruption in Indonesia Local Governments," Journal of Economics and Behavioral Studies, AMH International, vol. 12(4), pages 34-42.

    More about this item

    Keywords

    decentralization; corruption; subnational units; regional government;
    All these keywords.

    JEL classification:

    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R50 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - General

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