Is corruption contagious? An econometric analysis
Gbewopo Attila
†
CERDI-CNRS, University of Auvergne
† Please address correspondance to: Centre d’Etudes et de Recherches sur le Developpement Inter-natonal (CERDI), 65 Boulevard, François Mitterrand, 63000 Clermont Ferrand, France. E-mail :G.ATTILA@u-clermont1.fr .I thank also Jens Chr. Andvig. and Fredrik Wilhelmsson for their helpful comments. Financial supportfrom the Norwegian Research Council and the Norwegian Institute of International Affairs Project«Trade, growth and governance» is gratefully acknowledged. I thank Jan Risvik for language improve-ment. For an earlier draft of this paper, I am indebted to Pr. Jean-Louis Combes, Roland Kpodar, FlorentBresson, Gilbert Niyongabo, Jean-Pierre Tranchant, Bachir Diallo, Diard Marie-Claire as well as partici- pants at the annual meeting of the French Economic Association, 4-5 May 2005 for their constructivecriticisms. Views and errors are mine alone and should not be attributed to anyone or any institutions.
[Abstract]
In this paper, I analyze how corruption in one country may be affected by its neighbors’ corruption. It seeks to explain why corruption is perpetuating inlarge geographical areas populated by developing countries despite anticorruptionefforts made in the single country.In our empirical approach, we capture the spatial dependency by regional corrup-tion. Three main techniques are used: spatial autocorrelation tests, GMM and threestage least squares. Our results show that, a lower regional corruption (as measured by the average of the level of corruption in one country’s neighbors) is associatedwith a lower level of national corruption. Among the potential mechanisms explain-ing this correlation, the level of economic development (GDP per capita) seems to be the most important. Foreign aid and trade openness show less clear results. Non-economic mechanisms such as cross-country contagion processes of voice expres-sions and demands on accountability are other possible transmission mechanisms.
Keywords
: Corruption, economic development, trade, persistence, political factors,social factors.JEL classification: H1, O10, O2, Z13
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