Corruption in space: A closer look at the world's subnations

Stefan Borsky and Katja Kalkschmied

European Journal of Political Economy, 2019, vol. 59, issue C, 400-422

Abstract: Corruption levels differ not only between but also within countries. In this paper we analyze spatial interdependencies in corruption levels for a large sample of 1232 subnational regions from 81 countries. Based on a spatial autoregressive model, which controls for country-fixed effects and corrects for spatial autocorrelation in the error term, we find that a subnational region's corruption level is positively correlated with neighboring subnational regions' corruption levels. Extending the core model and allowing for heterogeneous spatial effects, we find that most spillovers among subnational regions occur within national borders. Moreover, in particular high income subnational regions and subnational regions with relative low corruption levels tend to spill in space. This is due to their high degree of connectivity in terms of economic, sociocultural and political exchange with other subnational regions. Our estimation results underline the importance to consider not only a subnational region's own characteristics, but also spatial interdependencies when implementing efficient anti-corruption policies at the local level.

Keywords: Subnational corruption; Spatial econometrics; Heterogeneous spatial effects (search for similar items in EconPapers)
JEL-codes: C21 D02 D73 P48 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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Working Paper: Corruption in space: A closer look at the world's subnations (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:poleco:v:59:y:2019:i:c:p:400-422

DOI: 10.1016/j.ejpoleco.2019.05.004

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