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Economics of trickle-down corruption

Author

Listed:
  • Guych Nuryyev
  • Charles Hickson

Abstract

Purpose - This study aims to examine the effect of the crude oil price crash of 2014 on corruption decentralisation. In a corrupt state, a significant decrease in the state revenue might lead to concentration of power in the hands of the political elite who try to maintain their income, or to a weakening of the elite’s control as the bureaucrats compete for bribes. Design/methodology/approach - Crude oil price crash provides a rare opportunity to test the effect of reduced state revenue on corruption decentralisation. This study constructs a measure for corruption decentralisation and analyses how it is affected by state income in 18 resource-rich and corrupt states. Findings - The empirical model suggests that there is a positive relationship between corruption decentralisation and state oil and gas revenue, implying that as the revenue decreases, political elite in the exporting countries manage to maintain their control over the bureaucrats. Originality/value - The results are important for academics as well as for policymakers, as they allow adjustment of anti-corruption efforts based on the level of corruption decentralisation.

Suggested Citation

  • Guych Nuryyev & Charles Hickson, 2020. "Economics of trickle-down corruption," International Journal of Development Issues, Emerald Group Publishing Limited, vol. 19(1), pages 93-102, March.
    • Handle: RePEc:eme:ijdipp:ijdi-09-2019-0164
    DOI: 10.1108/IJDI-09-2019-0164
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    More about this item

    Keywords

    Corruption centralisation; Oil revenue; Decentralisation; D73; H11; Q32;
    All these keywords.

    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development

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