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Who benefits from corruption; the private individual or the public purse?

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  • Vincent Tawiah
  • Abdulrasheed Zakari
  • James Xede

Abstract

In this paper, we examine the impact of corruption on wealth distribution between the public purse and private individuals conditioned on the institutional quality of a country. We used panel data on 83 countries from 2000 to 2017. Our results indicate that corruption helps private individuals to accumulate more wealth at the expense of the public purse in countries with low‐quality institutions. However, corruption increases the wealth in the public purse in countries with high‐quality institutions. Our results, therefore, imply that the institutional quality of a country significantly shapes how corruption affects the wealth of private individuals and the public purse. The results are pronounced in developing countries and robust to alternative measurements and endogeneity test.

Suggested Citation

  • Vincent Tawiah & Abdulrasheed Zakari & James Xede, 2023. "Who benefits from corruption; the private individual or the public purse?," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 28(3), pages 2900-2914, July.
    • Handle: RePEc:wly:ijfiec:v:28:y:2023:i:3:p:2900-2914
    DOI: 10.1002/ijfe.2570
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    1. Jun Du & Bach Nguyen, 2024. "The ‘play’ of institutions and firm investment: Evidence from a transition economy," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 29(3), pages 2740-2765, July.

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