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Axel Dreher, Christos Kotsogiannis and Steve McCorriston
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Steve McCorriston: University of Exeter

Public Economics from University Library of Munich, Germany

Abstract: The causes and consequences of corruption have attracted much attention in recent years by both academics and policy makers. Central in the discussion on the impact of corruption are perception-based indices. While informative, these indices are ordinal in nature and hence provide no indication of how much economic loss is attributed to corruption. Arguably, this shortcoming is rooted in the lack of a structural model. This is the issue addressed in this paper. By treating corruption as a latent variable that is directly related to its underlying causes, a cardinal index of corruption is derived for approximately 100 countries. This allows us to compute a measure of the losses due to corruption as a percentage of GDP per capita.

Keywords: Corruption; Latent Variables; Economic Development; Rule of Law (search for similar items in EconPapers)
JEL-codes: H10 O1 K49 C39 (search for similar items in EconPapers)
Date: 2004-06-08
New Economics Papers: this item is included in nep-law and nep-pol
Note: Type of Document - pdf
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Related works:
Journal Article: Corruption around the world: Evidence from a structural model (2007) Downloads
Working Paper: Corruption Around the World: Evidence from a Structural Model (2007) Downloads
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