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Myths and Realities of Governance and Corruption

  • Kaufmann, Daniel

A number of popular notions and outright myths on governance and corruption are addressed in this chapter. We distinguish clearly between governance and anti-corruption, while probing the links between both notions. In so doing we challenge the conventional definition of corruption as being too narrow, legalistic and unduly focused on the public sector, while underplaying the role of the private sector. We then challenge the notion that governance and corruption cannot be measured, showcasing the latest worldwide governance indicators, measuring six dimensions of governance and cover over 200 countries, based on multiple sources, including the EOS. Thanks to these governance indicators and related datasets, it has been possible to study the extent to which governance and anticorruption matters. Consistent with the adage that 'sunlight is the best disinfectant', the potential gains of embarking on a transparency reform strategy is given particular prominence in this chapter, and a detailed 12-point 'scorecard' for countries to rate themselves in terms of the implementation of concrete transparency measures is presented. The chapter then concludes with a call for a global compact on governance and anti-corruption, where the G-8 and other rich countries, the multinationals, IFIs, civil society and the government leadership in the emerging economies share responsibility in making concerted progress.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 8089.

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Date of creation: Oct 2005
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Publication status: Published in Global Competitiveness Report 2005-06 (2005): pp. 81-98
Handle: RePEc:pra:mprapa:8089
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  1. Daniel Kaufmann & Aart Kraay, 2002. "Growth without Governance," ECONOMIA JOURNAL OF THE LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION, ECONOMIA JOURNAL OF THE LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION, vol. 0(Fall 2002), pages 169-230, August.
  2. Friedrich Schneider & Dominik Enste, 2000. "Shadow Economies Around the World; Size, Causes, and Consequences," IMF Working Papers 00/26, International Monetary Fund.
  3. Daron Acemoglu & Simon Johnson & James A. Robinson, 2000. "The Colonial Origins of Comparative Development: An Empirical Investigation," NBER Working Papers 7771, National Bureau of Economic Research, Inc.
  4. Dollar, David & Levin, Victoria, 2005. "Sowing and reaping: institutional quality and project outcomes in developing countries," Policy Research Working Paper Series 3524, The World Bank.
  5. Isham, Jonathan & Kaufmann, Daniel & Pritchett, Lant H, 1997. "Civil Liberties, Democracy, and the Performance of Government Projects," World Bank Economic Review, World Bank Group, vol. 11(2), pages 219-42, May.
  6. Francisco Alcalá & Antonio Ciccone, 2003. "Trade and Productivity," Working Papers 12, Barcelona Graduate School of Economics.
  7. Dani Rodrik & Arvind Subramanian & Francesco Trebbi, 2004. "Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development," Journal of Economic Growth, Springer, vol. 9(2), pages 131-165, 06.
  8. Sanjeev Gupta, 1998. "Does Corruption Affect Income Inequality and Poverty?," IMF Working Papers 98/76, International Monetary Fund.
  9. Levin, Mark & Satarov, Georgy, 2000. "Corruption and institutions in Russia," European Journal of Political Economy, Elsevier, vol. 16(1), pages 113-132, March.
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