Do infrastructure reforms reduce the effect of corruption? Theory and evidence from Latin America and the Caribbean

Liam Wren-Lewis

No 576, Economics Series Working Papers from University of Oxford, Department of Economics

Abstract: This paper investigates the interaction between corruption and infrastructure policy reforms. I construct a simple model to illustrate how both an incerase in regulatory autonomy and privatisation may influence the effect of corruption. This interaction is then analysed empirically using a panel of 153 electricity distribution firms across 18 countries in Latin America and the Caribbean between 1995 and 2007. I find evidence that greater corruption is associated with lower firm efficiency, but that this association is reduced when an independent regulatory agency is present. These results survive a range of robustness checks including instrumenting for regulatory governance and corruption. I also find slightly less robust evidence that private ownership further mitigates the association between corruption and efficiency.

Keywords: Regulation; Corruption; Infrastructure (search for similar items in EconPapers)
JEL-codes: D73 L33 L51 L94 L98 (search for similar items in EconPapers)
Date: 2011-10-01
New Economics Papers: this item is included in nep-dev and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Related works:
Journal Article: Do Infrastructure Reforms Reduce the Effect of Corruption? Theory and Evidence from Latin America and the Caribbean (2015)
Working Paper: Do Infrastructure Reforms Reduce the Effect of Corruption? Theory and Evidence from Latin America and the Caribbean (2015)
Working Paper: Do Infrastructure Reforms Reduce the Effect of Corruption? Theory and Evidence from Latin America and the Caribbean (2015)
Working Paper: Do infrastructure reforms reduce the effect of corruption ? theory and evidence from Latin America and the Caribbean (2013)
Working Paper: Do Infrastructure Reforms Reduce the Effect of Corruption? Theory and Evidence from Latin America and the Caribbean (2011)
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