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Corruption Around The World: Evidence From A Structural Model

Author

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  • Axel Dreher

    (University of Exeter)

  • Christos Kotsogiannis

    (University of Exeter)

  • Steve McCorriston

    (University of Exeter)

Abstract

The causes and consequences of corruption have attracted much attention in recent years by both academics and policy makers. Central in the discussion on the impact of corruption are perception-based indices. While informative, these indices are ordinal in nature and hence provide no indication of how much economic loss is attributed to corruption. Arguably, this shortcoming is rooted in the lack of a structural model. This is the issue addressed in this paper. By treating corruption as a latent variable that is directly related to its underlying causes, a cardinal index of corruption is derived for approximately 100 countries. This allows us to compute a measure of the losses due to corruption as a percentage of GDP per capita.

Suggested Citation

  • Axel Dreher & Christos Kotsogiannis & Steve McCorriston, 2004. "Corruption Around The World: Evidence From A Structural Model," Public Economics 0406004, University Library of Munich, Germany.
  • Handle: RePEc:wpa:wuwppe:0406004
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    More about this item

    Keywords

    Corruption; Latent Variables; Economic Development; Rule of Law;
    All these keywords.

    JEL classification:

    • H10 - Public Economics - - Structure and Scope of Government - - - General
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • K49 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Other
    • C39 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Other

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