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Corruption in Developing Countries

  • Benjamin A. Olken
  • Rohini Pande

Recent years have seen a remarkable expansion in economists' ability to measure corruption. This, in turn, has led to a new generation of well-identified, microeconomic studies. We review the evidence on corruption in developing countries in light of these recent advances, focusing on three questions: how much corruption is there, what are the efficiency consequences of corruption, and what determines the level of corruption. We find robust evidence that corruption responds to standard economic incentive theory, but also that effects of anti-corruption policies often attenuate as officials find alternate strategies to pursue rents.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 17398.

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Date of creation: Sep 2011
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Publication status: published as Benjamin A. Olken & Rohini Pande, 2012. "Corruption in Developing Countries," Annual Review of Economics, Annual Reviews, vol. 4(1), pages 479-509, 07.
Handle: RePEc:nbr:nberwo:17398
Note: EFG PE POL
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