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Corruption, Income Inequality, and Poverty in the United States

Author

Listed:
  • Oguzhan C. Dincer

    (Illinois State University)

  • Burak Gunalp

    (Hacettepe University)

Abstract

In this study we analyze the effects of corruption on income inequality and poverty. Our analysis advances the existing literature in four ways. First, instead of using corruption indices assembled by various investment risk services, we use an objective measure of corruption: the number of public officials convicted in a state for crimes related to corruption. Second, we use all commonly used inequality and poverty measures including various Atkinson indexes, Gini index, standard deviation of the logarithms, relative mean deviation, coefficient of variation, and the poverty rate defined by the U.S. Census Bureau. Third, we minimize the problems which are likely to arise due to data incomparability by examining the differences in income inequality, and poverty across U.S. states. Finally, we exploit both time series and cross sectional variation in the data. We find robust evidence that an increase in corruption increases income inequality and poverty.

Suggested Citation

  • Oguzhan C. Dincer & Burak Gunalp, 2008. "Corruption, Income Inequality, and Poverty in the United States," Working Papers 2008.54, Fondazione Eni Enrico Mattei.
  • Handle: RePEc:fem:femwpa:2008.54
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    Cited by:

    1. Dobson, Stephen & Ramlogan-Dobson, Carlyn, 2012. "Why is Corruption Less Harmful to Income Inequality in Latin America?," World Development, Elsevier, vol. 40(8), pages 1534-1545.
    2. Marco Pani, 2011. "Hold your nose and vote: corruption and public decisions in a representative democracy," Public Choice, Springer, vol. 148(1), pages 163-196, July.
    3. Nicholas Apergis & Oguzhan Dincer & James Payne, 2010. "The relationship between corruption and income inequality in U.S. states: evidence from a panel cointegration and error correction model," Public Choice, Springer, vol. 145(1), pages 125-135, October.
    4. Douzounet Mallaye & Gaëlle Tatiana Timba & Urbain Thierry Yogo, 2015. "Oil Rent and Income Inequality in Developing Economies: Are They Friends or Foes?," Working Papers halshs-01100843, HAL.
    5. Gaëlle Tatiana TIMBA & Douzounet MALLAYE & Urbain Thierry YOGO, 2015. "Oil Rent and Income Inequality in Developing Economies: Are They Friends or Foes?," Working Papers 201502, CERDI.
    6. Humna Ahsan & Keith Blackburn, 2015. "Human capital and income distribution in a model of corruption," Centre for Growth and Business Cycle Research Discussion Paper Series 208, Economics, The Univeristy of Manchester.
    7. Ambar, Rabnawaz, 2015. "Corruption, Inequality and Economic Growth," MPRA Paper 70375, University Library of Munich, Germany, revised 2015.
    8. Ferreira de Mendonça, Helder & Martins Esteves, Diogo, 2014. "Income inequality in Brazil: What has changed in recent years?," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), April.

    More about this item

    Keywords

    Corruption; Income Inequality; Poverty;

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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