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The transition of corruption: From poverty to honesty

Erich Gundlach () and Martin Paldam

No 1411, Kiel Working Papers from Kiel Institute for the World Economy (IfW)

Abstract: Measures of corruption and income are highly correlated across countries. We use prehistoric measures of biogeography as instruments for modern income levels. We find that our instrumented incomes explain the cross-country pattern of corruption just as well as do actual incomes. This result demonstrates that the long-run causality is entirely from income to corruption. Hence, there is a Corruption Transition: As countries get rich, corruption vanishes.

Keywords: Corruption; Biogeography; Long-run development (search for similar items in EconPapers)
JEL-codes: B25 O1 (search for similar items in EconPapers)
Date: 2008
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