Corruption, privatisation and the distribution of income in Latin America

Antonio Rodriguez Andres and Carlyn Ramlogan-Dobson

Working Papers from Nottingham Trent University, Nottingham Business School, Economics Division

Abstract: This paper presents new evidence on income inequality in Latin America over the period 1981-2000. Using a panel data methodology, we find that a reduction in corruption is associated with a rise in inequality. This counterintuitive result can be explained by privatisation. Privatisation removes industries from government influence (and corruption) and worsens income inequality as new owners strive for efficiency and profits. The paper argues that structural reform policies aimed primarily at achieving positive and increasing growth rates do not adequately address the income distribution problem.

Keywords: Corruption; Latin America; Income inequality; Instrumental variables; Panel data; Privatisation. (search for similar items in EconPapers)
JEL-codes: O15 O54 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dev, nep-lam and nep-reg
Date: 2008-07
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http://www.ntu.ac.uk/research/document_uploads/85421.pdf First version, 2008 (application/pdf)

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Working Paper: Corruption, privatisation and the distribution of income in Latin America (2007)
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Persistent link: http://EconPapers.repec.org/RePEc:nbs:wpaper:2008/11

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