IDEAS home Printed from https://ideas.repec.org/p/cra/wpaper/2009-04.html
   My bibliography  Save this paper

Extraordinary Wealth, Globalization, and Corruption

Author

Listed:
  • Benno Torgler
  • Marco Piatti

Abstract

The billionaires of the world attract significant attention from the media and the public. The popular press is full of books selling formulas on how to become rich. Surprisingly, only a limited number of studies have explored empirically the determinants of extraordinary wealth. Using a large data set we explore whether globalization and corruption affect extreme wealth accumulation. We find evidence that an increase in globalization increases super-richness. In addition, we also find that an increase in corruption leads to an increase in the creation of super fortune. This supports the argument that in kleptocracies large sums are transferred into the hands of a small group of individuals.

Suggested Citation

  • Benno Torgler & Marco Piatti, 2009. "Extraordinary Wealth, Globalization, and Corruption," CREMA Working Paper Series 2009-04, Center for Research in Economics, Management and the Arts (CREMA).
  • Handle: RePEc:cra:wpaper:2009-04
    as

    Download full text from publisher

    File URL: http://www.crema-research.ch/papers/2009-04.pdf
    File Function: Full Text
    Download Restriction: no

    File URL: http://www.crema-research.ch/abstracts/2009-04.htm
    File Function: Abstract
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Razafindrakoto, Mireille & Roubaud, François, 2010. "Are International Databases on Corruption Reliable? A Comparison of Expert Opinion Surveys and Household Surveys in Sub-Saharan Africa," World Development, Elsevier, vol. 38(8), pages 1057-1069, August.
    2. Siegfried, John J & Round, David K, 1994. "How Did the Wealthiest Australians Get So Rich?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 40(2), pages 191-204, June.
    3. Nissanke, Machiko & Thorbecke, Erik, 2006. "Channels and policy debate in the globalization-inequality-poverty nexus," World Development, Elsevier, vol. 34(8), pages 1338-1360, August.
    4. Dietz, Simon & Neumayer, Eric & De Soysa, Indra, 2007. "Corruption, the resource curse and genuine saving," Environment and Development Economics, Cambridge University Press, vol. 12(01), pages 33-53, February.
    5. Levin, Mark & Satarov, Georgy, 2000. "Corruption and institutions in Russia," European Journal of Political Economy, Elsevier, vol. 16(1), pages 113-132, March.
    6. Xavier Gabaix & Augustin Landier, 2008. "Why has CEO Pay Increased So Much?," The Quarterly Journal of Economics, Oxford University Press, vol. 123(1), pages 49-100.
    7. Daniel Kaufmann & Aart Kraay & Massimo Mastruzzi, 2003. "Governance Matters III: Governance Indicators for 1996-2002," Development and Comp Systems 0308001, University Library of Munich, Germany.
    8. Bhattacharyya, Sambit & Hodler, Roland, 2010. "Natural resources, democracy and corruption," European Economic Review, Elsevier, vol. 54(4), pages 608-621, May.
    9. Robert J. Barro, 1999. "Determinants of Democracy," Journal of Political Economy, University of Chicago Press, vol. 107(S6), pages 158-183, December.
    10. Bebchuk, Lucian Arye & Fried, Jesse & Walker, David I, 2002. "Managerial Power and Rent Extraction in the Design of Executive Compensation," CEPR Discussion Papers 3558, C.E.P.R. Discussion Papers.
    11. Wade, Robert Hunter, 2004. "Is Globalization Reducing Poverty and Inequality?," World Development, Elsevier, vol. 32(4), pages 567-589, April.
    12. Naci Mocan, 2008. "What Determines Corruption? International Evidence From Microdata," Economic Inquiry, Western Economic Association International, vol. 46(4), pages 493-510, October.
    13. Kaufmann, Daniel & Kraay, Aart & Mastruzzi, Massimo, 2003. "Government matters III : governance indicators for 1996-2002," Policy Research Working Paper Series 3106, The World Bank.
    14. Atkinson, A.B., 2006. "Concentration among the Rich," WIDER Working Paper Series 151, World Institute for Development Economic Research (UNU-WIDER).
    15. Sanjeev Gupta & Hamid Davoodi & Rosa Alonso-Terme, 2002. "Does corruption affect income inequality and poverty?," Economics of Governance, Springer, vol. 3(1), pages 23-45, March.
    16. Vicente, Pedro C., 2010. "Does oil corrupt? Evidence from a natural experiment in West Africa," Journal of Development Economics, Elsevier, vol. 92(1), pages 28-38, May.
    17. Tim Hazledine & John Siegfried, 1997. "How did the wealthiest New Zealanders get so rich?," New Zealand Economic Papers, Taylor & Francis Journals, vol. 31(1), pages 35-47.
    18. Eric Neumayer, 2004. "The super-rich in global perspective: a quantitative analysis of the Forbes list of billionaires," Applied Economics Letters, Taylor & Francis Journals, vol. 11(13), pages 793-796.
    19. Hanne Fjelde, 2009. "Buying Peace? Oil Wealth, Corruption and Civil War, 1985—99," Journal of Peace Research, Peace Research Institute Oslo, vol. 46(2), pages 199-218, March.
    20. Bob Sutcliffe, 2004. "World Inequality and Globalization," Oxford Review of Economic Policy, Oxford University Press, vol. 20(1), pages 15-37, Spring.
    21. Kevin K. Tsui, 2011. "More Oil, Less Democracy: Evidence from Worldwide Crude Oil Discoveries," Economic Journal, Royal Economic Society, vol. 121(551), pages 89-115, March.
    22. Lucian Bebchuk, 2005. "The Growth of Executive Pay," Oxford Review of Economic Policy, Oxford University Press, vol. 21(2), pages 283-303, Summer.
    23. Axel Dreher & Noel Gaston, 2008. "Has Globalization Increased Inequality?," Review of International Economics, Wiley Blackwell, vol. 16(3), pages 516-536, August.
    24. Pierre Azoulay & Joshua S. Graff Zivin & Jialan Wang, 2010. "Superstar Extinction," The Quarterly Journal of Economics, Oxford University Press, vol. 125(2), pages 549-589.
    25. Axel Dreher, 2006. "Does globalization affect growth? Evidence from a new index of globalization," Applied Economics, Taylor & Francis Journals, vol. 38(10), pages 1091-1110.
    26. Treisman, Daniel, 2000. "The causes of corruption: a cross-national study," Journal of Public Economics, Elsevier, vol. 76(3), pages 399-457, June.
    27. Xiaobo Zhang & Kevin Zhang, 2003. "How Does Globalisation Affect Regional Inequality within A Developing Country? Evidence from China," Journal of Development Studies, Taylor & Francis Journals, vol. 39(4), pages 47-67.
    28. Kopczuk, Wojciech & Saez, Emmanuel, 2004. "Top Wealth Shares in the United States, 1916-2000: Evidence From Estate Tax Returns," National Tax Journal, National Tax Association;National Tax Journal, vol. 57(2), pages 445-487, June.
    29. Rosen, Sherwin, 1981. "The Economics of Superstars," American Economic Review, American Economic Association, vol. 71(5), pages 845-858, December.
    30. Paivi Lujala, 2010. "The spoils of nature: Armed civil conflict and rebel access to natural resources," Journal of Peace Research, Peace Research Institute Oslo, vol. 47(1), pages 15-28, January.
    31. Stephen Knack, 2001. "Aid Dependence and the Quality of Governance: Cross-Country Empirical Tests," Southern Economic Journal, Southern Economic Association, vol. 68(2), pages 310-329, October.
    32. Reinikka, Ritva & Svensson, Jakob, 2006. "Using Micro-Surveys to Measure and Explain Corruption," World Development, Elsevier, vol. 34(2), pages 359-370, February.
    33. repec:dau:papers:123456789/4352 is not listed on IDEAS
    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. Philip Hans Franses & Bert Groot, 2016. "Corruption and inequality of wealth amongst the very rich," Quality & Quantity: International Journal of Methodology, Springer, vol. 50(3), pages 1245-1252, May.
    2. repec:oup:cambje:v:42:y:2018:i:1:p:95-115. is not listed on IDEAS
    3. Thomas Goda, 2014. "Global trends in relative and absolute wealth concentrations," DOCUMENTOS DE TRABAJO CIEF 010897, UNIVERSIDAD EAFIT.
    4. Bosco, Bruno, 2016. "Old and new factors affecting corruption in Europe: Evidence from panel data," Economic Analysis and Policy, Elsevier, vol. 51(C), pages 66-85.
    5. Korom, Philipp & Lutter, Mark & Beckert, Jens, 2015. "The enduring importance of family wealth: Evidence from the Forbes 400, 1982 to 2013," MPIfG Discussion Paper 15/8, Max Planck Institute for the Study of Societies.

    More about this item

    Keywords

    Globalization; Extraordinary Wealth; Corruption; Superstars;

    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:cra:wpaper:2009-04. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Anna-Lea Werlen). General contact details of provider: http://edirc.repec.org/data/cremach.html .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.