Martin Paldam

The Transition of Corruption. Institutions and dynamics

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The data for corruption/honesty and income have a correlation of about 0.75, and a typical transition path. However, the correlation of the growth rate and honesty is negative. Thus, the short- and long-run findings are in contradiction. It is shown that the contradiction lasts a dozen years. The transition of corruption happens relatively late in the process of development and works through earlier changes in institutions. Countries with high and stable wealth and modern institutions get low corruption. Variables for the economic and political system explain as much as income, but system changes and uncertainty increase corruption. This is a second contradiction much like the first one. The two system variables have transitions too. To identify the non-spurious part of the relations, the D-index is defined as the difference between the corruption index and the transition path; it reduces the relations to the system variables, but they do not disappear.
TidsskriftEuropean Journal of Political Economy
Antal sider16
StatusE-pub ahead of print - sep. 2020

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