IDEAS home Printed from https://ideas.repec.org/p/aah/aarhec/2019-06.html

The Transition of Corruption - Institutions and dynamics

Author

Listed:
  • Martin Paldam

    (Department of Economics and Business Economics, University of Aarhus)

Abstract

The cross-country data for honesty/corruption and income has a correlation of about 0.75, and the data have a typical transition path; but the correlation of the growth rate and honesty is negative. Thus, the short and long-run findings are contradictory, and it is shown that the contradiction lasts a dozen years. The transition of corruption happens relatively late and works through changes in institutions. To catch all institutions the Polity-index is used for the political dimension and the Fraser-index of economic freedom for the economic one. The two indices explain as much as income, but they both have a transition, so the relations are partly spurious. To identify the non-spurious part of the relation and sort out causality, the D-index is defined as the difference between the corruption index and the transition path. Institutional instability increases corruption, but when institutions stabilize, both democracy and economic freedom increase honesty.

Suggested Citation

  • Martin Paldam, 2019. "The Transition of Corruption - Institutions and dynamics," Economics Working Papers 2019-06, Department of Economics and Business Economics, Aarhus University.
    • Handle: RePEc:aah:aarhec:2019-06
    as

    Download full text from publisher

    File URL: https://repec.econ.au.dk/repec/afn/wp/19/wp19_06.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Lambsdorff,Johann Graf, 2007. "The Institutional Economics of Corruption and Reform," Cambridge Books, Cambridge University Press, number 9780521872751, January.
    2. Hollis Chenery† & T.N. Srinivasan (ed.), 1988. "Handbook of Development Economics," Handbook of Development Economics, Elsevier, edition 1, volume 1, number 1.
    3. J. Behrman & T.N. Srinivasan (ed.), 1995. "Handbook of Development Economics," Handbook of Development Economics, Elsevier, edition 1, volume 3, number 4.
    4. Hollis Chenery† & T.N. Srinivasan (ed.), 1989. "Handbook of Development Economics," Handbook of Development Economics, Elsevier, edition 1, volume 2, number 2.
    5. Martin Paldam & Erich Gundlach, 2018. "Jumps into Democracy: Integrating the Short and Long Run in the Democratic Transition," Kyklos, Wiley Blackwell, vol. 71(3), pages 456-481, August.
    6. Christian Bjørnskov & Martin Paldam, 2012. "The spirits of capitalism and socialism," Public Choice, Springer, vol. 150(3), pages 469-498, March.
    7. Martin Paldam & Erich Gundlach, 2016. "Jumps into democracy: The transition in the Polity Index," Economics Working Papers 2016-05, Department of Economics and Business Economics, Aarhus University.
    8. Jayasri Dutta & Toke S. Aidt (ed.), 2016. "Corruption and Economic Development," Books, Edward Elgar Publishing, number 15608, August.
    9. J. Behrman & T.N. Srinivasan (ed.), 1995. "Handbook of Development Economics," Handbook of Development Economics, Elsevier, edition 1, volume 3, number 3.
    10. Toke S. Aidt, 2003. "Economic analysis of corruption: a survey," Economic Journal, Royal Economic Society, vol. 113(491), pages 632-652, November.
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. Gründler, Klaus & Potrafke, Niklas, 2019. "Corruption and economic growth: New empirical evidence," European Journal of Political Economy, Elsevier, vol. 60(C).
    2. Praveen Kumar, 2023. "How does Corruption Affect Innovation? - New Evidence from Macro-level Data," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 21(4), pages 925-941, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ruttan, Vernon W., 1998. "Growth Economics And Development Economics: What Should Development Economists Learn (If Anything) From The New Growth Theory?," Bulletins 12972, University of Minnesota, Economic Development Center.
    2. Diana Barros (a) Aurora A.C. Teixeira (b), 2021. "A Portrait of Development Economics in the Last Sixty Years," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 46(2), pages 69-118, June.
    3. Stephan Klasen, 2008. "Poverty, undernutrition, and child mortality: Some inter-regional puzzles and their implicationsfor research and policy," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 6(1), pages 89-115, March.
    4. Paldam, Martin, 2021. "The transition of corruption institutions and dynamics," European Journal of Political Economy, Elsevier, vol. 67(C).
    5. Paul Mosley & Robert Holzmann & Steen Jorgensen, 1999. "Social protection as social risk management: conceptual underpinnings for the social protection sector strategy paper," Journal of International Development, John Wiley & Sons, Ltd., vol. 11(7), pages 1005-1027.
    6. Ganguli, Ina & Hausmann, Ricardo & Viarengo, Martina, 2011. "Closing the Gender Gap in Education: Does It Foretell the Closing of the Employment, Marriage, and Motherhood Gaps?," Working Paper Series rwp11-021, Harvard University, John F. Kennedy School of Government.
    7. Arup Maharatna, 2008. "Development of What? An Exposition of the Politics of Development Economics," Working Papers id:1819, eSocialSciences.
    8. Robert Holzmann & Steen Jørgensen, 2001. "Social Risk Management: A New Conceptual Framework for Social Protection, and Beyond," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 8(4), pages 529-556, August.
    9. Perez-Aleman, Paola, 2000. "Learning, Adjustment and Economic Development: Transforming Firms, The State and Associations in Chile," World Development, Elsevier, vol. 28(1), pages 41-55, January.
    10. Jeannette Graulau, 2008. "‘Is mining good for development?’," Progress in Development Studies, , vol. 8(2), pages 129-162, April.
    11. Henri-François HENNER, 2002. "Compétitivité, réformes budgétaires et réduction de la pauvreté au Bénin. Croissance et pauvreté," Working Papers 200208, CERDI.
    12. Dercon, Stefan, 1998. "Wealth, risk and activity choice: cattle in Western Tanzania," Journal of Development Economics, Elsevier, vol. 55(1), pages 1-42, February.
    13. Bergh, Andreas & Nilsson, Therese, 2014. "Is Globalization Reducing Absolute Poverty?," World Development, Elsevier, vol. 62(C), pages 42-61.
    14. Michele Peruzzi & Alessio Terzi, 2018. "Growth Accelerations Strategies," Growth Lab Working Papers 112, Harvard's Growth Lab.
    15. Hayfa Grira, 2007. "Les déterminants du statut nutritionnel au Matlab : une analyse empirique," Post-Print halshs-00175088, HAL.
    16. Andrew D. Foster & Mark R. Rosenzweig, 2022. "Are There Too Many Farms in the World? Labor Market Transaction Costs, Machine Capacities, and Optimal Farm Size," Journal of Political Economy, University of Chicago Press, vol. 130(3), pages 636-680.
    17. Kanayo Kingsley Ogujiuba & Kizito Ehigiamusoe, 2014. "Capital Budget Implementation in Nigeria: Evidence from the 2012 Capital Budget," Contemporary Economics, Vizja University, vol. 8(3), September.
    18. Sharafat Ali, 2013. "The Small and Medium Enterprises and Poverty in Pakistan: An Empirical Analysis," European Journal of Business and Economics, Central Bohemia University, vol. 8(2), pages 25-301:8, July.
    19. James P. Smith & Duncan Thomas, 2003. "Remembrances of things past: test–retest reliability of retrospective migration histories," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 166(1), pages 23-49, February.
    20. Assuncao, Juliano J. & Ghatak, Maitreesh, 2003. "Can unobserved heterogeneity in farmer ability explain the inverse relationship between farm size and productivity," Economics Letters, Elsevier, vol. 80(2), pages 189-194, August.

    More about this item

    Keywords

    ;
    ;
    ;

    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • P48 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:aah:aarhec:2019-06. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: the person in charge (email available below). General contact details of provider: http://www.econ.au.dk/afn/ .

    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.