IDEAS home Printed from https://ideas.repec.org/p/mos/moswps/2009-07.html
   My bibliography  Save this paper

Does the Evidence on Corruption Depend on how it is measured? Results from a Cross Country Study on Micro Data sets

Author

Listed:
  • Ishita Chatterjee
  • Ranjan Ray

Abstract

This study compares the evidence on corruption between alternative data sets. These include the Corruption Perceptions Indices (CPI) that are conventionally used and the micro data sets from the International Crime Victim Surveys (ICVS) and the World Bank Enterprise Surveys (WBES) that have been used in recent applications. While a comparison between the evidence from the CPI and WBES constitutes a comparison of perception versus reality, the comparison of evidence from ICVS and WBES can be construed as a comparison of individual with business corruption. The study finds several similarities and differences between the pictures on corruption yielded by the alternative data sets. For example, while in case of low income countries, perception of business corruption seems to be worse than that based on firms’ actual experience of doing business there, the reverse is true for high income countries. The magnitude of individual corruption is consistently lower than that of business corruption, with the gap between the two forms of corruption closing only for high income countries. As a country develops and commercial transactions increase, the mix of corruption changes in favour of business corruption. While the study finds evidence of a negative association between per capita GNP and corruption rates, none of the three data sets provides any evidence of negative association between growth and corruption rates. The study also finds that while improvement in human development indicators such as literacy are effective instruments in controlling individual corruption, the strengthening of institutions such as the legal system and the regulatory mechanism are likely to be more effective in combating business corruption. The strengthening of trust, whether via improved literacy and development of social networks or via a strong legal system, and an effective and transparent regulatory mechanism is the key to combating both forms of corruption. A methodological contribution of this study is the combination of the information of the characteristics of the respondent with the country level indicators in analysing the determinants of corruption. A significant difference between the two forms of corruption is that, after controlling for the respondent’s attributes and the country indicators, while individual corruption showed an increase over time, this was not the case with business corruption. The importance of introducing the country effects is seen from the sign reversal of the time coefficient estimate that occurs in case of both individual and business corruption once we control for the effects of the country of residence of the respondent. The overall message of this study is that the authorities need to distinguish between different forms of corruption in devising policy intervention. As the mix of individual and business corruption changes with economic development, so should the mix of policy instruments in tackling corruption. The results also underline the need to undertake more studies that investigate the sensitivity of the evidence on corruption to alternative data sets.

Suggested Citation

  • Ishita Chatterjee & Ranjan Ray, 2009. "Does the Evidence on Corruption Depend on how it is measured? Results from a Cross Country Study on Micro Data sets," Monash Economics Working Papers 07-09, Monash University, Department of Economics.
  • Handle: RePEc:mos:moswps:2009-07
    as

    Download full text from publisher

    File URL: http://www.buseco.monash.edu.au/eco/research/papers/2009/0709corruptionchatterjeeray.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Hunt, Jennifer, 2004. "Trust and Bribery: The Role of the Quid Pro Quo and the Link With Crime," CEPR Discussion Papers 4567, C.E.P.R. Discussion Papers.
    2. I. Chatterjee & R. Ray, 2012. "Does the evidence on corruption depend on how it is measured? Results from a cross-country study on microdata sets," Applied Economics, Taylor & Francis Journals, vol. 44(25), pages 3215-3227, September.
    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. Dimant, Eugen, 2014. "The Antecedents and Effects of Corruption - A Reassessment of Current (Empirical) Findings," MPRA Paper 60947, University Library of Munich, Germany.
    2. I. Chatterjee & R. Ray, 2012. "Does the evidence on corruption depend on how it is measured? Results from a cross-country study on microdata sets," Applied Economics, Taylor & Francis Journals, vol. 44(25), pages 3215-3227, September.
    3. Anita K Zonebia & Arief Anshory Yusuf & Heriyaldi, 2015. "Income and Education as the determinants of Anti-Corruption Attitudes: Evidence from Indonesia," Working Papers in Economics and Development Studies (WoPEDS) 201502, Department of Economics, Padjadjaran University, revised Apr 2015.
    4. Ishita Chatterjee & Ranjan Ray, 2013. "The Role of Institutions in the Incidence of Crime and Corruption," Economics Discussion / Working Papers 13-17, The University of Western Australia, Department of Economics.
    5. Ishita Chatterjee & Ranjan Ray, 2009. "Crime, Corruption and Institutions," Monash Economics Working Papers 20-09, Monash University, Department of Economics.
    6. You, Jing & Nie, Huihua, 2017. "Who determines Chinese firms' engagement in corruption: Themselves or neighbors?," China Economic Review, Elsevier, vol. 43(C), pages 29-46.

    More about this item

    Keywords

    Business Corruption; Kernel density graphs; Social Network; Human Development Indicator; Regulatory Mechanism;

    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation

    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:mos:moswps:2009-07. 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: (Simon Angus). General contact details of provider: http://edirc.repec.org/data/dxmonau.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.