Corruption Epidemics

Sascha Becker, Peter Egger and Tobias Seidel

No 2008-09, Stirling Economics Discussion Papers from University of Stirling, Division of Economics

Abstract: When estimating the determinants of perceived corruption, economists assumed that there is full independence across countries. In the presence of peer-group or learning effects through cross-border economic activity (such as trade or labor migration), this assumption might be violated. We provide evidence that this is the case. Using a cross-section of 123 economies for the year 2000, we illustrate that corruption in one country spills over to adjacent economies. This finding implies that institutional changes reducing corruption in one country lead to smaller but qualitatively similar effects in neighboring countries.

Keywords: Perceived corruption; Institutions; Spatial econometrics (search for similar items in EconPapers)
Date: 2008-06
New Economics Papers: this item is included in nep-dev, nep-mig and nep-pol
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Citations: View citations in EconPapers (2)

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