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Construction Corrupts: Empirical Evidence from a Panel of 42 Countries

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  • P. Kyriacou, Andreas
  • Muinelo-Gallo, Leonel
  • Roca-Sagalés, Oriol

Abstract

The construction sector, whether privately or publically financed, is characterized by potentially large rents and government intervention. Not surprisingly then, both case-study and survey evidence has been provided highlighting the problem of corruption in this sector. In this article, we test the proposition that a bigger construction sector is likely to be inimical to clean government based on a panel of 42 countries over the period 1995 to 2011. We control for a range of potentially counfounding variables and the expectation that corrupt public officials may favor the development of this sector because it increases the volume of rents available to them. Our empirical evidence shows that a larger construction sector will tend to worsen perceptions of the extent to which public power is exercised for private gain.

Suggested Citation

  • P. Kyriacou, Andreas & Muinelo-Gallo, Leonel & Roca-Sagalés, Oriol, 2015. "Construction Corrupts: Empirical Evidence from a Panel of 42 Countries," MPRA Paper 61457, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:61457
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    Cited by:

    1. Andreas P. Kyriacou & Leonel Muinelo-Gallo & Oriol Roca-Sagalés, 2018. "The efficiency of transport infrastructure investment and the role of institutions: an empirical analysis," Working Papers. Collection B: Regional and sectoral economics 1802, Universidade de Vigo, GEN - Governance and Economics research Network.
    2. Andreas P. Kyriacou & Oriol Roca Sagalés, 2018. "Decentralization and governance in Europe: Evidence from different expenditure components," Working Papers. Collection A: Public economics, governance and decentralization 1802, Universidade de Vigo, GEN - Governance and Economics research Network.
    3. repec:kap:pubcho:v:172:y:2017:i:3:d:10.1007_s11127-017-0444-x is not listed on IDEAS

    More about this item

    Keywords

    Corruption; Construction Sector; Empirical Estimates; Reverse Causality;

    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • L74 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Construction

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