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Corruption and Growth: Evidence from the Italian Regions

Author

Listed:
  • Nadia Fiorino

    (University of L’Aquila)

  • Emma Galli

    (‘La Sapienza’ University of Rome)

  • Ilaria Petrarca

    (University of Verona)

Abstract

This paper investigates the impact of corruption on economic growth in the Italian Regions. We estimate a dynamic growth model for the period 1980-2004 addressing both the potential bias of the measures of corruption and the endogeneity between corruption and economic development. We find strong evidence of a negative correlation between corruption and growth. Moreover, since government intervention has been traditionally used to reduce income differentials between the Northern and the Southern regions, we also analyze the interaction between corruption and government expenditure. Our results indicate that corruption undermines the positive impact that public expenditures have on economic growth.

Suggested Citation

  • Nadia Fiorino & Emma Galli & Ilaria Petrarca, 2012. "Corruption and Growth: Evidence from the Italian Regions," European Journal of Government and Economics, Europa Grande, vol. 1(2), pages 126-144, December.
    • Handle: RePEc:egr:ejge00:v:1:i:2:p:126-144
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    5. Nedra Baklouti & Younes Boujelbene, 2015. "Exploring the Relationship between Democracy, Corruption and Economic Growth in MENA countries," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 11(3), pages 43-58, June.
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    11. Giommoni, Tommaso, 2021. "Exposure to corruption and political participation: Evidence from Italian municipalities," European Journal of Political Economy, Elsevier, vol. 68(C).
    12. Raul Caruso & Adelaide Baronchelli, 2013. "Economic aspects of the complementarity between corruption and crime: evidence from Italy in the period 1996-2005," International Journal of Monetary Economics and Finance, Inderscience Enterprises Ltd, vol. 6(2/3), pages 244-260.
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    14. Akbari, Mahsa & Bahrami-Rad, Duman & Kimbrough, Erik O., 2019. "Kinship, fractionalization and corruption," Journal of Economic Behavior & Organization, Elsevier, vol. 166(C), pages 493-528.
    15. Salah Alnahdi, 2020. "The Impact of Corruption on Healthcare Services: Empirical Evidence from the MENA Region," International Journal of Economics and Financial Issues, Econjournals, vol. 10(5), pages 8-15.
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    20. Ilaria Petrarca & Roberto Ricciuti, 2013. "The Historical Roots of Corruption and Economic Development in Italy," CESifo Working Paper Series 4212, CESifo.
    21. Ambar, Rabnawaz, 2015. "Corruption, Inequality and Economic Growth," MPRA Paper 70375, University Library of Munich, Germany, revised 2015.
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    More about this item

    Keywords

    corruption; associative crimes; economic growth; dynamic estimation;
    All these keywords.

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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