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Corruption, Economic Freedom and Political Freedom in South America: In Pursuit of the missing Link

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  • Garcia Callejas, Danny

Abstract

Resumen: La corrupción se puede definir como "el abuso de la autoridad o confianza pública con fines privados". Sin embargo, esta definición sugiere que la corrupción es una enfermedad de la sociedad y no un síntoma resultante de problemas estructurales como la inequidad o falta de democracia. Luego de analizar información proveniente de Freedom House y Transparency International, este estudio concluye que la liberalización económica y la democracia no están directamente ni linealmente relacionadas con la corrupción en Suramérica. Otros determinantes como la inequidad (política y económica) son esenciales para un análisis integral de la corrupción. Adicionalmente, la literatura actual adolece de una definición holística de corrupción que permita identificar y entender sus "verdaderas" causas. Al examinar diez países suramericanos durante el periodo 1995-2008, el análisis de cointegración de panel de datos sugiere que la corrupción, el crecimiento económico y la democracia no están conjuntamente cointegradas ni están relacionadas linealmente; hay un eslabón perdido. / Abstract: Corruption is defined as "the abuse of public authority or trust for private benefit." However, this paper argues that this definition frames corruption as a disease of society and not a symptom of structural problems such as inequality or lack of democracy. After analyzing data on corruption from Freedom House and Transparency International, this study concludes that corruption is not related to economic liberalization and democracy in a linear fashion. Other determinants such as inequality (political and economical) are lacking in the analysis of corruption. Additionally, the literature still lacks a comprehensive definition of corruption that may identify its "true" roots. A panel cointegration and panel data analysis suggests that corruption, economic growth and democracy are neither jointly cointegrated nor explained linearly; there is a missing link. Finally, this research is constrained to ten South American countries and the years 1995-2008.

Suggested Citation

  • Garcia Callejas, Danny, 2010. "Corruption, Economic Freedom and Political Freedom in South America: In Pursuit of the missing Link," Borradores Departamento de Economía 7336, Universidad de Antioquia, CIE.
    • Handle: RePEc:col:000196:007336
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    References listed on IDEAS

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    More about this item

    Keywords

    Corrupción; crecimiento económico; datos de panel; cointegración de panel; libertad política; Suramerica; Corruption; Economic Growth; Panel Data; Panel Cointegration; Political Freedom; South America;
    All these keywords.

    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • H83 - Public Economics - - Miscellaneous Issues - - - Public Administration
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models

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