IDEAS home Printed from https://ideas.repec.org/a/oup/wbecrv/v29y2015i2p353-384..html

Do Infrastructure Reforms Reduce the Effect of Corruption? Theory and Evidence from Latin America and the Caribbean

Author

Listed:
  • Liam Wren-Lewis

Abstract

This paper investigates the interaction between corruption and governance at the sector level. A simple model illustrates how both an increase in regulatory autonomy and privatization may influence the effect of corruption. The interaction is analyzed empirically using a fixed-effects estimator on a panel of 153 electricity distribution firms across 18 countries in Latin America and the Caribbean from 1995–2007. Greater corruption is associated with lower firm labor productivity, but this association is reduced when an independent regulatory agency is present. These results survive a range of robustness checks, including instrumenting for regulatory governance, controlling for a large range of observables, and using several different corruption measures. The association between corruption and productivity also appears weaker for privately owned firms compared to publicly owned firms, though this result is somewhat less robust.

Suggested Citation

  • Liam Wren-Lewis, 2015. "Do Infrastructure Reforms Reduce the Effect of Corruption? Theory and Evidence from Latin America and the Caribbean," The World Bank Economic Review, World Bank, vol. 29(2), pages 353-384.
    • Handle: RePEc:oup:wbecrv:v:29:y:2015:i:2:p:353-384.
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1093/wber/lht027
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or

    for a different version of it.

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mustafa Kadir DOĞAN & Funda ALTUN, 2024. "Impact of Corruption on Utility Prices: A Theoretical and Empirical Analysis for the Electricity Markets," Sosyoekonomi Journal, Sosyoekonomi Society, issue 32(60).
    2. Saul Estrin & Adeline Pelletier, 2018. "Privatization in Developing Countries: What Are the Lessons of Recent Experience?," The World Bank Research Observer, World Bank, vol. 33(1), pages 65-102.
    3. Castaneda, Araceli & Phillips, Michele & Jamison, Mark, 2014. "Considerations for the Design and Transformation of Regulatory Systems," MPRA Paper 113243, University Library of Munich, Germany.
    4. Antonio Estache & Caroline Philippe, 2012. "The Impact of Private Participation in Infrastructure in Developing Countries: Taking Stock of about 20 Years of Experience," Working Papers ECARES ECARES 2012-043, ULB -- Universite Libre de Bruxelles.
    5. Imam, M. & Jamasb, T. & Llorca, M. & Llorca, M., 2018. "Power Sector Reform and Corruption: Evidence from Electricity Industry in Sub-Saharan Africa," Cambridge Working Papers in Economics 1801, Faculty of Economics, University of Cambridge.
    6. Pless, Jacquelyn & Fell, Harrison, 2017. "Bribes, bureaucracies, and blackouts: Towards understanding how corruption at the firm level impacts electricity reliability," Resource and Energy Economics, Elsevier, vol. 47(C), pages 36-55.
    7. Tina Søreide, 2014. "Drivers of Corruption : A Brief Review," World Bank Publications - Books, The World Bank Group, number 20457, April.
    8. Iossa, Elisabetta & Martimort, David, 2016. "Corruption in PPPs, incentives and contract incompleteness," International Journal of Industrial Organization, Elsevier, vol. 44(C), pages 85-100.
    9. Chang, Chong-Chuo, 2023. "The impact of quality of institutions on firm performance: A global analysis," International Review of Economics & Finance, Elsevier, vol. 83(C), pages 694-716.
    10. Izak Atiyas, 2012. "Enhancing Competition in A Post-Revolutionary Arab Context: Does the Turkish Experience Provide any Lessons?," Working Papers 743, Economic Research Forum, revised Dec 2012.
    11. Gunther Bensch, 2019. "The effects of market-based reforms on access to electricity in developing countries: a systematic review," Journal of Development Effectiveness, Taylor & Francis Journals, vol. 11(2), pages 165-188, April.
    12. Randrianarisoa, Laingo M. & Oum, Tae Hoon & Yu, Chunyan, 2023. "Corruption and airport efficiency: A study on Asian airports," Transport Policy, Elsevier, vol. 130(C), pages 46-54.
    13. Randrianarisoa, Laingo Manitra & Bolduc, Denis & Choo, Yap Yin & Oum, Tae Hoon & Yan, Jia, 2015. "Effects of corruption on efficiency of the European airports," Transportation Research Part A: Policy and Practice, Elsevier, vol. 79(C), pages 65-83.
    14. Graziano Abrate & Fabrizio Erbetta & Giovanni Fraquelli & Davide Vannoni, 2015. "The cost of corruption in the Italian solid waste industry," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 24(2), pages 439-465.
    15. repec:tur:wpapnw:4 is not listed on IDEAS
    16. Imam, Mahmud I. & Jamasb, Tooraj & Llorca, Manuel, 2019. "Sector reforms and institutional corruption: Evidence from electricity industry in Sub-Saharan Africa," Energy Policy, Elsevier, vol. 129(C), pages 532-545.
    17. Antonio Estache & Liam Wren-Lewis, 2010. "What Anti-Corruption Policy Can Learn from Theories of Sector Regulation," Working Papers ECARES ECARES 2010-033, ULB -- Universite Libre de Bruxelles.
    18. Antonio Estache & Liam Wren-Lewis, 2011. "Anti-Corruption Policy in Theories of Sector Regulation," Chapters, in: Susan Rose-Ackerman & Tina Søreide (ed.), International Handbook on the Economics of Corruption, Volume Two, chapter 9, Edward Elgar Publishing.
    19. Mahmud I Imam & Tooraj Jamasb & Manuel Llorca, 2019. "Political Economy of Reform and Regulation in the Electricity Sector of Sub-Saharan Africa," Working Papers EPRG1917, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.

    More about this item

    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • L98 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Government Policy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:wbecrv:v:29:y:2015:i:2:p:353-384.. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press (email available below). General contact details of provider: https://edirc.repec.org/data/wrldbus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.