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Abstract

This chapter critically surveys recent advances in the methodology of measuring corruption in the field. The issue of measurement is central in the corruption literature, and the choice of method can significantly influence our thinking about the determinants, the mechanics, and the impact of corruption on the economy. We provide a conceptual categorization of different methods of measuring corruption ranging from surveys to direct observation of bribe payments in the field, while discussing the methodological and conceptual advantages and disadvantages of each method. Finally, we highlight areas of complementarity across methods and discuss avenues for future research.

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... The complexity of corruption in terms of definition and measurement has been widely recognized by scholars (Beeri & Navot, 2013;Bussell, 2015;Graycar, 2015;Gupta, 1995;Heywood, 2017;Heywood & Rose, 2014;Jancsics, 2019;Knack, 2007;Mungiu-Pippidi & Dadašov, 2016;Rose, 2018;Sequeira, 2012, UNODC & UNDP, 2018. ...
... Sample surveys are generally favored to measure experiences of corruption directly from those involved/impacted, be they citizens, businesses or civil servants, and thus overcome non-reporting problems affecting criminal justice statistics (Blind, 2011;Herrera et al., 2007;Jandl, 2017;Knack, 2007;Lynch, 2006;Sequeira, 2012;UNODC-UNDP, 2018). A major question is whether existing corruption surveys can be used to monitor Target 16.5. ...
... These methods are mainly used for advocating for the fight against corruption, for awareness-raising activities guiding policy makers, investors and donors. Several scholars (Heywood & Rose, 2014;Knack, 2007;Mungiu-Pippidi & Dadašov, 2016;Sequeira, 2012;UNODC-UNDP, 2018) have highlighted validity, accuracy and explanatory shortcomings related to these methods. From a conceptual point of view, they were mainly criticized because they combine different types and shades of corruption, large number of variables referring to a wide spectrum of phenomena (Knack, 2007;Sequeira, 2012;UNODC-UNDP, 2018). ...
Article
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Tracing progress in implementing the sustainable development goals (SDGs) is at the core of pushing and accounting for change. However, monitoring SDGs is challenged by a lack of purpose‐fit and high‐quality indicators based on data that are collected through a sound methodology, generated regularly, comparable over time, and publicly accessible. Assessing and improving the quality of existing data is essential for helping countries to generate an evidence base for action. General criteria for evaluating data quality are already available at the national and international level but their practical operationalization for the assessment of specific SDGs indicators is still underdeveloped. Taking target 16.5 as a case study, this paper evaluates the quality of existing corruption surveys and their relevance for SDGs. Results show that the main challenges concern data validity (they measure only one aspect of corruption), comparability (they use culturally biased definitions), periodicity (they are not regularly developed), and raw‐data accessibility. This paper develops an original framework for benchmarking the overall methodological quality of existing corruption metrics. This framework can be used beyond the immediate context of corruption measurement and SDGs assessment. The same logic and methodology can, indeed, be employed to evaluate the quality of other metrics and support national governments and practitioners in identifying the informational and methodological gaps to be addressed in order to improve and make the best use of available statistical information.
... Il Forum economico mondiale stima il costo della corruzione nell'ordine di oltre il 5% del Pil globale e la Banca mondiale valuta in oltre un miliardo di dollari il costo di tangenti pagate a livello internazionale. Ma i costi della corruzione sono alti anche quando essa interviene ostacolando la realizzazione efficiente ed equa di servizi pubblici (Sequeira, 2012). Transparency International stima che nei Paesi in via di sviluppo la corruzione sia all'origine dell'innalzamento del costo per il collegamento delle abitazioni alle reti idriche del 30% e che ciò aumenti di oltre 48 miliardi di dollari il costo del raggiungimento degli obiettivi dei Millennium Development Goals relativi a reti idriche e igieniche (Global Corruption Report, 2006;. ...
... Se, per esempio, la maggior parte degli esperti in Nigeria sono uomini d'affari impegnati nel settore dell'estrazione di petrolio, e questo settore viene percepito come un settore particolarmente a rischio di corruzione, la Nigeria finirà con l'occupare una posizione alta nel ranking mondiale dei Paesi corrotti, con un'alta variabilità nella distribuzione della percezione della corruzione tra settori, all'interno della Nigeria. (2007) Possono essere influenzate dalla copertura mediatica Mancini et al. (2017) Non sono legate linearmente con le esperienze dirette Donchev e Ujhelyi (2014) Unità campionarie (esperti) Errore di campionamento Sequeira (2012) ...
... L'International Crime Victim Surveys (Icvs) invece rileva la corruzione sperimentata direttamente da singoli individui nelle loro interazioni con pubblici ufficiali. Queste indagini consentono di studiare la diversa distribuzione e incidenza della corruzione nei vari settori di attività e di approntare strategie politico-istituzionali di contrasto alla corruzione diversificate in funzione dei suoi costi nei diversi settori (Sequeira, 2012;Svensson, 2003;Fisman e Svensson, 2007). ...
Book
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Il volume affronta il tema della misurazione della corruzione: un tema centrale, perché la capacità di disporre di strumenti utili ad analizzarne l'effettiva consistenza, a evidenziare i fattori di rischio e a monitorare l'impatto prodotto dalle misure di prevenzione e con-trasto costituisce il necessario completamento di un'efficace politica pubblica anticorruzione. Il nesso di coerenza e di strumentalità ri-spetto alle esigenze conoscitive poste dalle politiche nazionali di con-trasto alla corruzione amministrativa costringe per un verso a fare i conti con i limiti degli indicatori di corruzione esistenti; per l'altro stimola alla sperimentazione di strumenti nuovi, anche sfruttando le potenzialità degli Open Data. Il volume si articola in tre parti, nelle quali sono affrontate questio-ni metodologiche connesse all'elaborazione degli strumenti di misu-razione della corruzione, profili di policy legati alle diverse modalità di misurazione della corruzione e sperimentazioni concrete di stru-menti di misurazione basati sull'utilizzo di diverse basi di dati oggi disponibili. Michela Gnaldi è professore associato di Statistica sociale presso il Dipartimento di Scienze Politiche dell'Università degli studi di Peru-gia. Ha trascorso gli anni iniziali della propria carriera all'estero, come research fellow al Department of Statistics della University of Glasgow (UK) e come statistica alla National Foundation for Educational Research (UK). Ha maturato una vasta esperienza nel campo delle tecniche statistiche di analisi sociale-in particolare, per la mi-surazione in campo educativo, la misurazione della corruzione, l'ana-lisi del comportamento di voto-e nell'analisi di grandi e complessi dataset. Su questi temi ha alle proprie spalle numerose pubblicazioni in riviste di prestigio internazionale. Collabora come editor e mem-bro di comitati editoriali con riviste internazionali (Springer). Benedetto Ponti, Ph.D. in Diritto pubblico, è professore associato di Diritto amministrativo presso il Dipartimento di Scienze Politiche dell'Università degli Studi di Perugia, dove tiene corsi di Diritto dei media digitali e Diritto dell'informazione. Sulle stesse tematiche è do-cente presso la Scuola di Giornalismo Radiotelevisivo di Perugia. È consulente dell'Autorità nazionale anticorruzione in materia di tra-sparenza amministrativa. È componente del comitato scientifico di a/simmetrie-Associazione Italiana per lo Studio delle Asimmetrie Economiche e di LSDI-Libertà di Stampa Diritto di Informazione. I principali oggetti della sua attività di ricerca riguardano la traspa-renza amministrativa, il regime dei dati pubblici, l'organizzazione e imparzialità dell'amministrazione.
... Our domain-specific definition of corruption is: "The aim of corruption [in public procurement] is to steer the contract to the favoured bidder without detection. This is done in a number of ways, including avoiding competition through, e.g., unjustified sole sourcing or direct contracting awards; or favouring a certain bidder by 1 Knack, Kugler, and Manning 2003;Sequeira 2012. corruption are even more unreliable than perceptions of everyday corruption since experts and citizens have almost no direct experience of it. ...
... The review of the literature encompassed widely cited academic papers reviewing corruption measurement and research papers using public procurement corruption proxies similar to ours; while we also reviewed the policy literature on corruption prevention, corruption identification and in general good practice guides 31 (Chong, Klien, & Saussier, 2015;Klasnja, 2016;OECD, 2007;Pricewaterhouse Coopers, 2013;Sequeira, 2012;Transparency International, 2006;World Bank, 2009). ...
Article
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Measuring high-level corruption is subject to extensive scholarly and policy interest, which has achieved moderate progress in the last decade. This article develops two objective proxy measures of high-level corruption in public procurement: single bidding in competitive markets and a composite score of tendering ‘red flags’. Using official government data on 2.8 million contracts in twenty-eight European countries in 2009–14, we directly operationalize a common definition of corruption: unjustified restriction of access to public contracts to favour a selected bidder. Corruption indicators are calculated at the contract level, but produce aggregate indices consistent with well-established country-level indicators, and are also validated by micro-level tests. Data are published at http://digiwhist.eu/resources/data/ .
... Respondents provide their understanding about the business environment in a given country departing from precise ideological assumptions. According to Sequeira (2012), one of the most important cognitive biases affecting subjective measures of corruption is the bandwagon effect, which relates to the fact that perceptions of respondents tend to climb aboard the bandwagon of the common perceptions of corruption in a given country. According to Andvig «this makes it almost impossible to determine whether the perception of increasing corruption levels worldwide is based on facts or not» (Andvig et al. 2000). ...
... Another cognitive bias affecting subjective indicators of corruption is the «halo effect», i.e. the tendency to associate corruption with lower standards of development (Sequeira 2012). Several scholars have observed that perceptions about corruption in less developed countries may be influenced by development trends. ...
Article
Measuring political orders has become a new frontier in the emerging mode of governance. Over the recent decades, ambitious anti-corruption strategies have been accompanied by a proliferation of performance indicators that have grown substantially in number and typologies. The study of metrics and their use in global governance has also reached greater attention. Yet, the relationship between politics and information remains controversial, and scholars do not agree on the capacity, role and performativity of indicators in serving or contesting power structures standing behind governance exercises. By focusing on two of the most widely used indicators of corruption– the World Bank’s Control of Corruption indicator (CC) and Transparency International’s Corruption Perception Index (CPI)– this article defines to what extent these measures have contributed to delimit our understanding of corruption, by overemphasising the role of single individuals (public agents) and the absence of market competition, and by de facto discouraging a more contextualised understanding of the transnational political economy of corruption. By questioning some of the values and conventions vested in corruption indicators, this article scrutinises methodological individualism choices that have been pivotal in normalising and institutionalising the framing of corruption as a delimited (preferably national) abomination.
... An alternative argument is that the opposition has less incentive to be corrupt due to the need to signal competence to voters, as well as inadequate experience and a lack of networks necessary to misappropriate ministerial resources (Bratton and Logan, 2015;Plescia and Kritzinger, 2017). On the empirical front, there has been limited progress in reconciling this debate due to the challenges in detecting and measuring corruption (Treisman, 2000;Sequeira, 2012;Zitzewitz, 2012) as well as the endogenous allocation of cabinet positions between political parties (Shvetsova, 2003;Humphreys, 2008;Goodhart, 2013). This paper attempts to fill this gap. ...
... A final concern is that the capacity of the OAG to detect and monitor corruption within government institutions might be low (Sequeira, 2012). This is however unlikely for several reasons. ...
Thesis
This thesis constitutes three distinct by related papers that examine how electoral and legislative institutions shape public spending behaviour in Kenya. The first paper examines how power sharing - the inclusion of opposition ministers into the cabinet - affects political corruption and accountability through direct audits of misappropriation of public funds and the associated likelihood of facing parliamentary sanctions. Exploiting a difference-in-difference design to address the endogenous allocation of ministerial portfolios, I find that opposition ministers misappropriated more resources than incumbent ministers for political gain, given their constrains in engaging in alternative strategies of electoral manipulation. Further analysis suggests that power sharing undermined political accountability by inducing bias in sanctioning corrupt politicians. I find that co-partisanship between ministers and the head of the Public Accounts Committee significantly lowered disciplinary sanctions. The second paper examines how political alignment between local and central government politicians affect the provision of local public goods and services. Using a regression discontinuity design on close elections, I find that aligned constituencies experienced a diferential increase in the proportion and value of projects abandoned midway through their construction cycle (stalled) and non-existing (ghost) projects. Stalled and ghost projects increased disproportionately at the end of the electoral year, suggesting that accumulated rents were more likely to be diverted for electoral gain. Consistent with alignment weakening political accountability, aligned constituencies received fewer legislative sanctions relative to unaligned constituencies. The third paper tests for public spending spillovers across local governments. Using an expenditure reform that led to a significant increase in public spending among several geographically proximate counties, I examine how counties sharing a geographical boundary reacted to the policy. Employing a spatial difference-in-diffierence design, I find evidence of free riding in border counties, relative to observationally similar counties located further away. Disaggregated data reveals that spillovers enhanced clientelistic political exchanges. Border counties shifted spending towards targeted goods, and these effects were stronger before elections and for hegemonic incumbents. Further results from micro-level surveys suggest that free riding was welfare reducing.
... Corruption is a phenomenon that is notoriously difficult to measure and study (Heinrich and Hodess, 2011). Existing literature has a history of being fragmented in the shadow of alternative methods such as case and survey studies, expert opinions, minding gaps in primary and secondary data, market and statistical inference, and direct observation (Sequeira, 2012;Bautista-Beauchesne and Garzon, 2019: 724). Investigating efficient anti-corruption strategies particularly calls for methodological variety (Jain, 2001). ...
Article
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The agenda for the fight against corruption has become a prominent part of the relationships of international organizations with nation-states. This article analyses the fight against corruption as a vital topic in Turkey's bid for European Union (EU) membership. It also assesses the EU's approach and framework for the candidate countries. For this purpose, qualitative document analysis is carried out on 80 EU documents on Turkey for the years between 1998 and 2021, based on process tracing. The analysis demonstrates that corruption is a persistent issue in Turkey across multiple fields. Progress is still slow, and Turkey is far from fulfilling the membership requirements for the fight against corruption. The EU has advocated for political will and a new strategy to address corruption in Turkey, focusing on institutional capacity and governance, international commitments, the fight against clientelism and political corruption, and the independence of the judiciary.
... The presence of a single red-flag indicator does not in itself indicate corruption, although the more red flags there are the higher the chance of corruption. The list of red flags is based on many years of literature and expert judgments, which has resulted in some useful indicators of suspected corruption (Chong et al., 2016;OECD, 2007;PricewaterhouseCoopers and Ecorys, 2013;Sequeira, 2012;Transparency International, 2009;World Bank, 2014). Some possible indicators are a framework agreement with a tenderer, a contract term that is too long (or even indefinite). ...
... The presence of a single red-flag indicator does not in itself indicate corruption, although the more red flags there are the higher the chance of corruption. The list of red flags is based on many years of literature and expert judgments, which has resulted in some useful indicators of suspected corruption (Chong et al., 2016;OECD, 2007;PricewaterhouseCoopers and Ecorys, 2013;Sequeira, 2012;Transparency International, 2009;World Bank, 2014). Some possible indicators are a framework agreement with a tenderer, a contract term that is too long (or even indefinite). ...
... One increasingly popular proxy indicator approach is to identify spending gaps using different measurements aiming to capture the same or very similar sets of transactions (Sequeira, 2012). Such approaches either collate two administrative datasets (e.g. ...
Technical Report
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Measuring corruption is indispensable for identifying effective anticorruption policies and tracking progress towards lower levels of corruption. While there is a widespread perception that researchers and policymakers lack adequate quantitative corruption indicators, we argue that in fact there is an abundance of such metrics, although gaps remain. Tried-and-tested indicators range from expert ratings through national representative bribery surveys until transaction-based proxy indicators such as public procurement risk indicators. However, the diversity of measurement instruments and corrupt behaviours tracked creates new challenges: selecting indicators congruent with research and policy objectives, and combining different indicators into a coherent assessment (e.g. composite scores). This article reviews a series of state-of-the-art indicators and provides guidance to researchers and policymakers in selecting indicators appropriate to diverse use-cases.
... On the other hand, as they are indirect measures against corruption, their main limitation lies in where they might not express corruption itself but other forms of inefficiency. (Sequeira, 2012) Further contiguous measures use "red flag" indicators, as proxy measurements of corruption. These indicators signal risk of corruption rather than actual corruption, and they are expected to be correlated to corrupt practices rather than perfectly matching them. ...
... On the other hand, they are indirect measures of corruption. Their main limitation lies in where they might not express corruption itself but other forms of inefficiency (Sequeira, 2012). In this sense, a high deviation of observed data from the hypothesized condition of absence of corruption might be a signal of inefficiency, rather than corruption. ...
Chapter
This chapter deals with corruption measurement. It devotes particular attention to revising major measures currently in use to assess corruption and corruption risk, including a whole new generation of corruption indicators empowered by data availability and the development of new data analytics technologies. Purposely, the chapter also stresses potentials, limits and degrees of validity of existing measures. Finally, it pinpoints future prospects and developments in this field, which should enhance our capability to measure corruption, in such a way that bias is minimized and support for policy making is exploited.
... Despite the considerable progress made in recent decades in the diagnosis of corruption (Auriol & Søreide, 2017;Sequeira, 2012;Fazekas & Kocsis, 2020), there remains a definite lack of applied research aimed at supporting public authorities in the management of corruption risks. This is partly explained by the absence of efforts to integrate anti-corruption research findings into theoretical frameworks and practical tools for the management of risk in public projects (Johnsøn, 2015). ...
Conference Paper
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The aim of this paper is to investigate the use of open procurement data in corruption risk management and to test two analytical methods for identifying suspicious contracts. The two methods we look at are: 1) the CRI method and 2) the isolation forest algorithm for anomaly detection. We apply both methods on the Government of Quebec's open procurement dataset. We provide suggestions for adapting such methods to other procurement datasets from different national and subnational jurisdictions and insight on strategic and project-level anti-corruption governance of public procurement projects.
... Over the last three decades, the interest in the construction and use of governance indicators has led to a burgeoning production of corruption (Sequeira, 2012) and transparency (although to a lesser extent) indicators (Cucciniello et al., 2016). This proliferation of measures has encouraged a growing complexity in both data gathering and methodologies, but also raised significant criticisms regarding the method through which corruption and transparency have been defined and operationalized (Malito, 2014). ...
Article
Our paper investigates the intertwined relation among transparency, civic capital and political accountability in a large sample of Italian municipalities using a new indicator of institutional transparency. Firstly, we test the hypothesis that civic capital affects transparency of public administrations; secondly, we verify whether in municipalities where civic capital is high, citizens’ attention toward government accountability is also high, making it politically unfeasible to disregard the demand for transparency. We find that civic capital positively affects transparency and the latter, in turn, is politically rewarding for the local administrators only conditional to the level of civic capital. Our findings are robust to different samples and endogeneity concerns.
... Over the last three decades, the interest in the construction and use of governance indicators has led to a burgeoning production of corruption (Sequeira, 2012) and transparency (although to a lesser extent) indicators (Cucciniello et al., 2016). This proliferation of measures has encouraged a growing complexity in both data gathering and methodologies, but also raised significant criticisms regarding the method through which corruption and transparency have been defined and operationalized, i.e. the procedures of their quantification (Malito, 2014). ...
... 4 Corruption was also estimated using surveys, interviews, or even direct observations (Reinikka and Svensson 2006;Banerjee and Pande 2007;Fisman and Svensson 2007;Olken and Barron 2009). In recent years, corruption is increasingly measured by way of subtraction or cross-checking (Reinikka and Svensson 2004;Fisman and Wei 2004;Sequeira 2012). Fisman and Wei (2004) measured tax evasion by the discrepancy in the monetary values of the same products reported by Hong Kong's exports and China's imports. ...
Article
Full-text available
Integrity and research ethics are cherished institutions in academic world. Although most societies have rules and codes that govern ethical conducts in research, few studies have provided quantitative evidence on the impacts of these regulations and codes on the behaviors of researchers. In the context of a nationwide anti-corruption campaign in China, this paper evaluates the changes of principal investigators' reimbursement behavior in a leading university when new reimbursement policies were introduced. Utilizing a novel grant dataset and a regression discontinuity design, we find that the new policies lowered PIs' monthly average amount of reimbursement from research grants by 35%, which can be interpreted as a reduction in grant misuse. Following speculations we argue that institutionalizing orchestrated efforts on grant management, payroll systems, and research integrity education is in the right direction toward building China into a true scientific power.
... These survey-based measures attempt to elicit truthful reporting of bribes through standardised questions to contextualised respondents' actions. But the reliability and accuracy of these survey-based data crucially rely on the quality of the question wording, on the cultural differences among respondents that may lead to very different interpretations of the same question, and also on the respondents' truthful reporting of bribing (Sequeira, 2012). ...
Preprint
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Our study examines whether actual corruption, measured by individuals direct experience of corruption episodes (bribery), matches their perceptions of the phenomenon. Our experimental participants play a repeated public good game with mandatory minimum contribution and are given the possibility to bribe a computerized bureaucrat in order to free-ride. We elicit beliefs about the perceived level of corruptibility of the bureaucrat and others' corruption attempts. We study participants' willingness to corrupt and the gap between perceived and actual corruption under two information conditions. Results show that, although anonymous, spreading news about an attempt of corruption is enough to discourage such attempts, lowering the corruption rate. Consequently , when receiving no information, participants expect others to corrupt more, raising the index of perceived corruption.
... These methods include for example the comparison of administrative data on public funds obtained at different levels of the government (Reinnika & Svensson, 2004), records of exported and imported goods produced by the exporting and importing country (Fisman & Wei, 2004), or data of corruption audits of different years (Ferranz & Finan, 2011). Although these field studies increased the understanding of the factors and costs of corruption in some settings, only a few rely on direct corruption measures (Sequeira, 2012;Olken & Barron, 2009). ...
Article
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Nowadays, among the main social concerns of the Spanish society we find corruption and fraud, which occupy the second place in terms of relevance according to recent data. The traditional neoclassical economic approaches concentrate on the construction of economic models that aim to explain the causes of both social phenomena. However, in the last decade several studies have emerged focusing on a behavioral approach to improve the explanatory capacity of such models. In this sense, economic experiments have been implemented to examine, from a different perspective, the determinants of corruption, on the one hand, and fiscal fraud, on the other. Few empirical studies relate both social problems, especially when we refer to the tax evasion of individual economic agents. Therefore, this paper aims to review and deepen the understanding of the factors that determine and relate tax evasion and corruption, from an experimental approach.
... A second generation of measures sought to address these problems (Johnston, 2000;Reinikka & Svensson, 2006;Sequeira, 2012): for example, Transparency International launched an index of 'bribe payers' in business while the World Bank's Business Environment and Enterprise Performance Survey (BEEPs) measured businesspersons' experience of corruption rather than their perceptions. Nevertheless, the measures still relied on individuals to report accurately; this may lead to under-reporting, either because of fears associated with reporting behaviour that is considered 'deviant' or, conversely, because certain informal behaviours are seen as so normal that they are not considered corrupt. ...
Article
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Efforts to evaluate the impact of anti-corruption programmes face numerous difficulties related to the complexity and hidden nature of corruption, the political sensitivity of the topic, and the ability of corrupt networks to respond flexibly to interventions. This makes it difficult to measure changes in corruption levels and problematic to attribute them to interventions. This article shows how a theory-based evaluation that builds on academic research can elaborate a set of intermediate outcomes for the evaluation of anti-corruption programmes, and showcases several purpose-built tools for evaluating different aspects of capacity building. It also draws on learning from two evaluations of Anti-Corruption programmes in the Caribbean to demonstrate how anti-corruption theory is being translated into law enforcement practice in two ways: (i) through economic models of criminals as rational actors whose behaviour can be changed through incentives and disincentives; (ii) and through social norms models which argue that reducing corruption requires deeper social change that resonates with or adapts local norms.
... For recent surveys of the literature, seeSequeira (2012) andOlken and Pande (2012). ...
... For examples of studies using direct observation in the field see Olken and Barron (2009) and Sequeira and Djankov (2014). For a review of the different methodologies employed for the empirical study of corruption, see Sequeira (2012). monetary rewards and penalties, can prevent public officials from abusing their positions and thus causing harm to society. 3 Although the existing studies have increased our understanding of why and how corruption occurs, identifying successful anti-corruption strategies remains a challenge. ...
Article
Using a laboratory experiment, we assess whether increasing competition among public officials reduces extortionary corruption. We find that increasing the number of providers has no effect on bribe demands when citizens' search costs are high, but it increases corruption when search costs are low. The effect is absent in a parallel setting framed as a standard market, which we attribute to citizens using a nonsequential search strategy as opposed to sequential search in the corruption setting. We conclude that efforts to reduce search costs, such as infrastructure investments, are preferable to anti‐corruption policies aimed at increasing the number of providers. (JEL D73, D49, C91)
... Expert knowledge varies and is sometimes inadequate, and the experts often lack strong incentives to enlist and spend much time doing a serious coding job, including searches for additional information. Furthermore, limited and differentiated knowledge leaves room for the so-called 'halo effect,' which is the tendency for a good (or bad) impression of performance in one area to influence opinion regarding other areas (Sequeira, 2012). These circumstances draw attention to the three-fold challenge related to the recruitment of experts. ...
Article
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Different measures of democracy rely on different types of data. Some exclusively rely on observational data, others rely on judgement-based data in the form of in-house coded indicators or expert surveys. A third set of democracy measures combines information from indicators based on different types of data, some of them also data from representative surveys of the mass public. This article discusses the advantages and disadvantages of these different types of data for the measurement of electoral and liberal democracy. The discussion is based on the premise that the main priorities must be to establish a high degree of concept-measure consistency, i.e. indicators capture relevant aspects of the core concept of interest in a precise and unbiased manner, and to provide high coverage. The basic argument of the article is that no type of data is superior to others in all respects. The article draws on examples from extant datasets to illustrate the tradeoffs and it offers suggestions about how to reduce some of the potential drawbacks.
... However, more research is required to test whether ethical climate affects the likelihood of corruption via motives for corruption, and whether these, in turn, affect corrupt decisions. Yet, while more experimental research is needed, experiments can only test a limited number of variables at a time, and can create artificial situations that do not represent real-life situations (Sequeira 2012). In contrast, questionnaires enable us to gain insight into multiple key correlates of corruption by surveying large relevant samples, thereby providing insights into respondents' proneness to corruption in the real world. ...
Article
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Abstract: The aim of this research was to examine how organizational and individual factors, in concert, shape corruption. We examined whether the ethical climate of organizations is related to corruption, and if so, whether it affects corruption through individual motives for corruption. A large-scale questionnaire study was conducted among public officials (n = 234) and business employees (n = 289) who were in a position to make corrupt decisions. The findings suggest that public and private sector employees who perceive their organizational climate as more egoistic and less ethical are more prone to corruption. This relationship was fully mediated by individual motives, specifically by personal and social norms on corruption. These results indicate that employees who perceive their organization’s ethical climate as more egoistic and less ethical experience weaker personal and social norms to refrain from corruption, making them more corruption-prone. Hence, strategies addressing the interplay between organizational factors and individual motives seem promising in curbing corruption. To effectively withhold employees from engaging in corruption, organizations could deploy measures that strengthen an organizations’ ethical climate and encourage ethical decision-making based on concern for the wellbeing of others, as well as measures increasing the strength of personal and social norms to refrain from corruption. Keywords: bribery; corruption; ethical climate; organizations; personal and social norms Text: https://www.rug.nl/research/portal/files/77175741/admsci_08_00004_v2.pdf
... 13 For a detailed discussion of perception based measures of corruption see, for example, Kaufmann et al. (2007). 14 A critical evaluation of these methods has been provided by Sequeira (2012), as reported in ANAC (2013). 15 Golden and Picci (2005) find that corruption increases the costs of public infrastructures realisation, especially in the South of Italy. ...
Article
The aim of this paper is to provide an empirical test of the role of competition in procurement in reducing the effects of corruption. For this purpose, the paper examines whether competition is able to constrain the waste effects of corruption on the efficiency of execution of public works, building on the results provided by Finocchiaro Castro et al. Int Tax Pub Fin 21(4):813–843, (2014). For this purpose, a two-stage analysis is carried out. In the first stage, a non-parametric approach (data envelopment analysis—DEA) investigates the relative efficiency of each public work execution; in the second stage, the determinant factors of the variability of efficiency scores are investigated. Our results show that increasing competition reinforces the negative effects of environmental corruption on public works execution.
Article
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Do corrupt officials govern differently in elected office? This article develops a theoretical framework and analyzes new data from financial disclosures to estimate the governing costs of corruption. First, I uncover substantial hidden wealth held by roughly one quarter of the legislators in the Russian Duma; these “kompromat deputies” are vulnerable to damaging information being used against them by the regime. Analyzing their behavior in office, I find that these deputies are less active and more absent members of parliament. When called to vote, kompromat deputies from the opposition also more eagerly support the regime’s political agenda. Finally, kompromat deputies are less likely to win reelection, suggesting that they have shorter time horizons as well as that parties have incentives to rotate them out. Autocrats permit and then monitor corruption in order to co-opt potential challengers, who in turn trade loyalty to the regime in exchange for opportunities to self-enrich.
Article
The agenda for the fight against corruption has become a prominent part of international organizations' relationships with nation-states. This article discusses topics vital to Turkey's bid for European Union (EU) membership under the Copenhagen criteria: corruption, the fight against corruption, and EU demands and expectations. It also assesses the EU's approach and framework for the candidate countries. For this purpose, qualitative document analysis is carried out on 80 EU documents on Turkey for the years 1998-2021, based on process tracing. The analysis demonstrates that corruption is a persistent issue in Turkey across multiple fields. Progress is still slow, and Turkey is far from fulfilling the membership requirements for the fight against corruption. The EU has advocated for political will and a new strategy to address corruption in Turkey, focusing on institutional capacity and governance, international commitments, the fight against clientelism and political corruption, and the independence of the judiciary.
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This study evaluates whether and how the services provided by Italian museums are influenced by the quality of the institutional context at the regional level. Institutional quality is measured by a range of indicators largely employed in the literature, such as the Institutional Quality Index (IQI), the European Quality of Government Index (EQI), and their components. Resorting to spatial autoregressive models, the presence of spatial dependence in museum service provision is also investigated. The analysis shows that the common institutional context is significant, especially for public museums, and it explains part of the spatial correlation among museums within regions.
Chapter
Within the framework of European Union, the corruption problem generates economic losses every year that slow down the continent´s development. The public procurement procedure is one of the sectors affected by this phenomenon of corruption, and the European Union is working to implement mechanisms that prevent and avoid fraudulent behaviour. In this sense, the institution has decided to replace the classic “lowest price” award criterion with the currently in force “most economically advantageous offer” or MEAT. This study seeks to identify red flags, that is, fraud risk indicators, relating them to the different award criteria used in the process. The results shown on the European maps show that Denmark is vulnerable to the red flag of excessive duration, while Spain show risks in terms of the final value of contract. Ultimately, the behaviour of each country is different in public procurement procedures.KeywordsCorruptionEuropean UnionPublic procurementAward criteriaRed flags
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The difficulties associated with conventional corruption measurements as employed in comparative country evaluations concern the accuracy they provide in assessing and explaining corruption. These conventional measures regard corruption as a one-dimensional phenomenon (quantified by a single score) which varies in incidence but not in form between countries. Such measures frequently associate corruption with bribery. But this one-dimensional composite measurement of corruption is insufficient to capture corruption in less developed economies, particularly in Africa, where corruption is perceived as taking many forms. Transparency International’s assessment of Tanzania (recently graduated by the World Bank to middle-income country status), demonstrates the misleading consequences of such composite, ubiquitous metrics. Perceptions of corruption as well as the diverse activities classifiable as corrupt practices are complex concepts; so any single indicator applied internationally may fail to accurately quantify these concepts; nor will such measures help to identify potential anti-corruption intervention strategies.
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In this paper, we analyze the influence of corruption perception, experiences of corruptive behavior, and healthcare autonomy on the public trust in Montenegrin healthcare, by surveying the general population before and after the global COVID-19 pandemic. By providing a quasi-replication of a previous empirical study of corruption and trust in the Croatian public healthcare sector, we introduce the COVID-19 pandemic as a new research context. Before the pandemic, we found a consistent and significant negative influence of the corruptive practices and the generally perceived level of corruption (corruption salience) on the trust in public healthcare. The emergence of COVID-19 had mixed effects: while there is a slightly higher effect of corruption salience to the preference of public healthcare, corruptive experiences still matter but are tolerated much higher than before the pandemic. Public assessment of the autonomy of the health system increases preference for public healthcare, both before and after the pandemic, although the emergence of COVID-19 somewhat lowers this effect. The obtained results point to the most significant challenges of the ‘post-COVID-19’ social context to public health policymaking and management of public healthcare institutions. These include focusing the public healthcare reforms on corruption, reducing waiting times for different diagnostics and medical procedures in the public healthcare system, and regulating the ‘dual practice’ (simultaneous work in public and private healthcare institutions).
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The efficacy of corruption perception indices to truly capture and accurately measure corruption behaviours has been often criticised. In fact, perceptions about corruption may not match actual experience and could represent distorted beliefs. Motivated by this criticism, we investigate the difference between perceived and experienced corruption (i.e., bribery) in public services in Europe by means of a theoretical model and an empirical analysis. Firstly, we model perceived corruption as a function of experienced corruption and a perception bias. Then, we employ a generalised setting of structural equation models to derive two distinct measures of perceived and experienced corruption from microdata on the public administration sector in Europe. The indices we obtain allow us to compare countries according to both measures of public corruption. Finally, our results suggest that perceptions of corruption may be affected by sources of media bias.
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Studi ini bertujuan mengidentifikasi potensi kerentanan korupsi dan imple-mentasi skema akuntabilitas pada sejumlah lembaga yang terlibat dalam penan-ganan program Pemulihan Ekonomi Nasional (PEN). Cakupan aspek risiko korupsi dalam studi ini meliputi aspek kerentanan dan potensi bahaya (hazard) korupsi dalam beberapa intervensi PEN antara lain: (1) Jaminan Pengaman Sosial;(2) Bantuan UMKM; dan (3) Pengalokasian Dana PEN. Identifikasi im-plementasi akuntabilitas pengelolaan dana PEN dilakukan terhadap sejumlah lembaga pemerintah yang terlibat secara teknis sesuai dengan UU No.2/2020. Secara teknis lembaga yang terlibat adalah pemerintah (sebagai representasi sisi fiskal), Bank Indonesia (sisi moneter) dan Otoritas Jasa Keuangan (OJK) serta Lembaga Penjamin Simpanan (LPS) di sisi sektor keuangan. Temuan studi ini menunjukkan bahwa terdepatan kerentanan korupsi dan hazard (kasus) korupsi di tiga intervensi program PEN di atas. Kerentanan diidentifikasi berbasis atas potensi terjadi tindakan korupsi sesuai dengan UU No.31/1999 Tentang Tindak Pidana Korupsi. Khusus hazard identifikasi dilakukan terhadap potensi kerugian korupsi berdasarkan kasus korupsi yang ditangani oleh Aparat Penegak Hukum (APH). Studi ini menemukan bahwa akuntabilitas publik selama penangangan Pandemi tahun 2020 dan 2021 bervariasi. Bank Indonesia dan pemerintah yang diwakili oleh Kementerian Keuangan merupakan institusi yang menyampaikan akuntabilitas kinerja dengan baik. Hasil studi ini dapat digunakan sebagai acuan dalam pencegahan korupsi melalui pengelolaan risiko korupsi dengan cara memperkecil peluang kerentanan korupsi dan meminimumkan hazard korupsi. Pengaturan yang mewajibkan akuntabilitas oleh seluruh pihak yang memiliki diskresi dalam pengelolaan situasi darurat perlu dilakukan untuk memastikan efektifitas kebijakan.
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Preliminary studies indicate that ideologies and worldviews are key in understanding the motivation behind corruption. Yet, there is no model seeking to explain corrupt intention that incorporates ideology and worldviews as predictors. Our objective was to propose a model integrating ideological factors (social dominance orientation [SDO] and right-wing authoritarianism [RWA]) and their underlying worldviews (competitive worldview beliefs [CWB] and dangerous worldview beliefs [DWB]) as predictors of corrupt intention and attitudes toward corrupt people and examine the model in the high corruption context of Brazil. For that purpose, preregistered hypotheses were tested across six studies. Results confirmed that corrupt intention is predicted by SDO but not RWA, while attitudes toward corrupt people are predicted by RWA but not SDO (Studies 1, 2, and 4). Replicating these findings cross-culturally, World Values Survey data (Study 3) indicated that corrupt intention is predicted by a proxy SDO index but not by a proxy RWA index. Experimentally increasing DWB amplified corrupt intention, but attitudes toward corrupt people remained unaffected (Study 5). Study 6 further confirmed the independence of corrupt intention and attitudes toward corrupt people, with corrupt intention primarily predicted by CWB and attitudes toward corrupt people primarily predicted by RWA. Hence, the first social psychological model that seeks to explain corruption integrating ideologies and worldviews was successfully proposed with implications for future research. (PsycInfo Database Record (c) 2022 APA, all rights reserved).
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The methodology of assessing the level of corruptibility of the society occupies an important place in the strategic programs of anti-corruption activities. The obtained rating indicators reflect the dynamics of corruption in the country, and the change of the state’s position in the ranking show the efficiency of anti-corruption policy. Since the data of obtained ratings differ significantly, the urgent scientific problem is to combine them in a single integral assessment. The authors have developed a methodology of integral assessment of the level of corruption in the country and evaluated the influence of different social and economic factors on it. Integral assessment was carried out on the basis of initial indicators Corruption Perception Index, Index of Economic Freedom, World Government Indicator, Doing Business, Political Risk Services International Country Risk Guide. We have used the method of modified principal component to determine gross coefficients of the above indicators in the integral assessment. The following indicators were found to have a significant impact on the level of corruption: human development index, education index, GDP per capita, coefficient of human inequality, employment to population ratio, unemployment. A multi-factor model has been developed that makes it possible to evaluate the efficiency of anti-corruption measures taken.
Article
Punishment is one of the main methods for preventing corruption. However, studies on the effect of size and probability of punishment on bribe-taking have not yielded conclusive results, possibly because studies often abstract from internal costs of wrongdoing. We introduce a punishment by a fine or termination of the task, both with varying probabilities, in a laboratory task modeling the decision to take a bribe. The punishment decreased the probability of taking higher bribes, even though the probability of taking lower bribes was unaffected. Participants took fewer bribes when the fine was larger and more probable. We did not observe any clear negative effects of small punishment crowding out intrinsic motivation to behave honestly. However, we found that the effects of punishment differ based on emotionality and honesty-humility of participants. The study shows that the prospect of punishment may deter dishonest behavior; however, personality characteristics should be taken into account when devising an effective deterrence policy.
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Evidence-based regulation is a term of art that refers to the process of making decisions about regulation based on evidence generated through systematic research. There is increasing pressure to treat evidence-based regulation as a global best practice, including in the area of anti-bribery law. Too little attention has been paid to the fact that under certain conditions evidence-based regulation is likely to be a less appealing method of decision making than the alternative – namely, relying on judgment. Those conditions are: it is difficult to collect data on either interventions or outcomes; accurate causal inferences are difficult to draw; there is little warrant for believing that the same causal relationships will apply in a new context; or the decision makers in question lack the capacity to undertake one of these tasks. These conditions are likely to be present in complex, transnational, decentralized, and dynamic forms of business regulation such as the global anti-bribery regime.
Chapter
Corruption is one of the greatest challenges of development in developing countries particularly in Africa where the state is run like a personal enterprise. Since the end of the Cold war, the international community has shown considerable interest in the study and control of corruption in developing societies leading to billions of dollars investments in anticorruption cleanups. This chapter argues that although there has been considerable success in the measurement of corruption using corruption perception index, BEEPS, PETS, case studies, and direct observation, and despite the sub rosa nature of the problem, only marginal success has been achieved in measuring corruption victimization in many of these societies. The consequence of this is a lack of synergy between corruption victimization data sets and anti-corruption programs.
Article
One of the few certainties we have in dealing with corruption lies in its adaptive nature. Over time, corruption has in fact proved to be able to change, evolve and adapt within all political systems. Such an adaptive nature calls for close scrutiny of the setting or space where corruption spreads out. Therefore, this raises questions about the unappreciated risks and immeasurable opportunities for corruption in the ever-changing and interconnected world of techno-social systems we live in. This article aims to advance the policy and regulatory debate surrounding corruption by focusing on its complex and adaptive nature. In applying the main tenets of complexity theory, the analysis builds on the well-known Cynefin framework. This decision-aiding framework proves to be an insightful tool for shedding light on some critical features of corruption (eg its perception and the affected confidence).
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This literature review looks at the use of tablets within educational settings. Specifically, it outlines three main areas of rationale for their use: pedagogical change, 21st century learning, and logistical and economic considerations. We believe this is of additional relevance due to the current pandemic and potential opportunity for incorporating technology into a postlockdown ‘catch-up curriculum’. The use of tablets evaluated here does not look at the effectiveness of online learning; instead, it focuses on their use in classrooms, specifically using tablets as a resource for research and learning, much like an encyclopaedia. We evaluate the benefits of using this type of technology to enhance learning and conclude that, although tablets can be used successfully, this is not always the correct option.
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We employ laboratory experiments to examine the effects of corrupt law enforcement on crime. We embed corruption in a social dilemma where citizens choose whether to obey the law or to break the law and impose a negative externality on others. Police officers observe citizens' behavior and can impose fines on law-breakers or extort bribes from any citizen. We find that the presence of police, even if they are corrupt, substantially reduces crime as compared to a baseline setting without police. Corrupt police officers use bribes in a targeted manner as a substitute for fines to punish law-breakers. We also test the effectiveness of two reward mechanisms aimed at reducing police corruption, both of which are based on society-wide police performance measures and not on the monitoring of individual officers. Both mechanisms make bribery more precisely targeted toward law-breakers, and one of them leads to a moderate reduction in crime.
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Ever since the 1990s, anti-corruption scholars and practitioners became aware of the reasons for failures of anti-corruption reforms in developing countries from different theoretical perspectives. Yet the pieces of specific case analysis with newly emerged approaches – neo-institutional approaches – are still limited. This dissertation addresses the limitations and shows the usefulness of neo-institutional approaches by providing an in-depth analysis of the possible reasons for failures of anti-corruption reforms in Kenya mainly from the new approaches. In the case of Kenya, donors’ interests, citizens’ collective action dilemmas, presidents’ political will, and weak institution are shown to be central challenges for the success of anti-corruption reforms.
Chapter
In the panorama of Italian corruption prevention policies, the importance of relying on corruption indicators is central, in particular for the development of prevention plans, introduced by the Italian law, by each authority. The central issue is not as much quantifying the amount of corruption, as understanding where it comes from, and under what conditions it is possible to turn on an alert. In this context, there is a need to rely not only on robust indicators of “corruption”, but also on indicators capable of “alerting” the system in the presence of risk factors. This is a field in which Italy is developing a leading experience since the development of “abnormal indicators” by the National Anti-Corruption Authorities (ANAC) in the field of public contracts. “Contrast” indicators developed by ANAC are a further new group of interesting indicators aimed at assessing the effectiveness of prevention policies with respect to controlling corruption.
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There is extensive evidence on waste effects of environmental corruption in public works procurement. However, corruption is not the only source of waste. In this paper, we adopt a wider perspective and look at the environmental institutional quality, identifying the channels through which it can lead to different types of waste in public works execution. We firstly provide some empirical evidence on public works contracts managed by a large sample of Italian municipalities, showing that performance measures of public works execution are associated with the quality of local institutional environment in which they are executed. Motivated by this evidence, we develop a model where weak institutions entail low accountability of purchasing officers, thus they have low incentives to pursue the mandated task of monitoring the execution of contracts, even if no bribery occurs. Then, we assume that endemic environmental corruption increases the return of managerial effort devoted to rent-seeking activities for getting cost overruns, leading the contractor to divert effort from the productive activity. Overall, our model predictions conform well with the empirical evidence on Italian public works execution.
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Il contrasto ai fenomeni corruttivi è divenuto, nel corso degli ultimi de-cenni, una politica pubblica di rilievo primario. A tutti i livelli – globale, europeo, nazionale – si è assistito all’adozione di una serie di interventi vol-ti ad introdurre e/o a rafforzare i meccanismi di prevenzione e di repressio-ne della corruzione. Allo stesso tempo, sono venuti affermandosi metodi di misurazione del fenomeno corruttivo, che operano principalmente su due fronti: da un lato, nella direzione di orientare le scelte di investimento in relazione al grado di corruzione, dall'altro, valutare l'efficacia delle politi-che di contrasto al fenomeno corruttivo impostate a livello statale. Secondo la banca mondiale la corruzione rappresenta l’ostacolo più im-portante allo sviluppo economico e sociale a livello mondiale (World Bank, 2006a). La lotta alla corruzione, insieme a politiche di buon governo, sono ritenute imprescindibili condizioni per il sostegno dello sviluppo sostenibile (World Bank, 2006b). Il Forum economico mondiale stima il costo della corruzione nell’ordine di oltre il 5% del PIL globale e la Banca Mondiale valuta in oltre un miliardo di dollari il costo di tangenti pagate a livello in-ternazionale. Ma i costi della corruzione sono alti anche quando essa inter-viene ostacolando la realizzazione efficiente ed equa di servizi pubblici (Sequeira, 2012). Transparency International stima che nei Paesi in via di sviluppo la corruzione innalzi il prezzo per collegare le abitazioni alle reti idriche del 30% e che ciò aumenti il costo del raggiungimento degli obietti-vi dei Millennium Development Goals relativi a reti idriche e igieniche di oltre 48 miliardi di dollari (Global Corruption Report, 2006, 2008). Alti li-velli di corruzione sono anche associati a bassi livelli di PIL pro-capite, sebbene la direzione di questa relazione causale non sia ancora chiara. Murphy et al. (1993), Ehrlich e Lui (1999), Lambsdor (2007) e molti altri ritengono che la causalità vada dall’alta corruzione al basso PIL, e ritengo-no dunque che la corruzione sia causa di abbassamento del PIL pro-capite. Altri invece (si veda Treisman, 2000 e Paldam, 2002) ritengono che la tran-sizione da una situazione ad alta corruzione a una a basso livello corruttivo sia il prodotto dello sviluppo economico. Gli ultimi due decenni di straordinario sviluppo in termini di ampiezza e spessore degli studi sul tema della corruzione sono stati innescati dalla cre-scente consapevolezza dei costi che impone, sebbene i costi associati alla corruzione rappresentino solo l’ultimo anello quantificabile di una catena distorsiva complessa, che altera le attività economiche, riduce gli investi-menti, indebolisce gli effetti attesi delle politiche pubbliche, intralcia il (buon) funzionamento delle istituzioni. Ne consegue che il monitoraggio a fini di contrasto ex post ed ex ante della corruzione è una condizione cru-ciale per l’innalzamento della qualità di uno Stato e della sua integrità sotto il profilo politico-sociale, giuridico ed economico. A livello scientifico, la sfida principale rimane oggi la misurazione della corruzione. Senza misure accurate e affidabili non solo diventa difficile co-gliere l’estensione e l’ordine di grandezza del fenomeno, ma anche indiriz-zare strategie d’intervento istituzionale e politico di contrasto e repressione. La misurazione della corruzione è difficile per una molteplicità di motivi, alcuni dei quali sono “a monte” e legati al fatto che, come vedremo, la cor-ruzione è un fenomeno sommerso e multidimensionale. Altri sono invece specificamente legati al particolare tipo di misura impiegata per la sua quantificazione. Infatti, le misure più comunemente usate per misurarla - le cosiddette misure soggettive e le misure oggettive - presentano limiti con-cettuali, metodologici e politici (Heywood and Rose, 2014; Carloni, 2017a) che ne limitano l’utilità, anche ai fini della predisposizione di politiche an-ticorruzione efficaci. Per esempio, come verrà discusso più estesamente nel seguito, le misure percetion-based, essendo basate sulla percezione che della corruzione hanno gli esperti, non riflettono necessariamente le reali esperienze di fatti corruttivi vissuti in prima persona. D’altra parte, le misu-re giudiziarie pongono altre questioni, legate da una parte alla loro limitata portata applicativa in indagini cross-nazionali e dall’altra alla loro bassa utilità in funzione preventiva. Obiettivo di questo lavoro è una rassegna critica delle principali misure di corruzione. In questa rassegna, l’attenzione è dedicata oltre che ai tradi-zionali strumenti di misurazione della corruzione, anche alle misure di ri-schio e prevenzione. I primi propongono una valutazione ex-post dell’evento corruttivo, cioè a evento accaduto, e inquadrano quest’ultimo nelle tradizionali fattispecie penali. Le seconde invece segnalano ex ante tutte quelle cattive condotte che, anche se non penalmente perseguibili, suonano come campanelli di allarme, allertando l’attenzione al fine di pre-venire l’insorgenza di fatti corruttivi.
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Purpose This study developed a model of corruption that measured the impact of sports corruption on organizational outcomes (i.e., win difference and attendance) and the mediating role of institutional reputation. How the form and extent of the corruption impacted these organizational outcomes was also examined. Design/methodology/approach Archival data were collected and then structural equation modeling (i.e., path analysis) was used to analyze the model and estimate the parameters. Findings The model was a good fit. The extent of the violation served as an antecedent to sanctions and institutional reputation mediated the relationship between the extent of the violation and organizational outcomes. A weak but negative correlation between sanctions and institutional reputation was also found. Practical implications Rather than seeking to prevent specific forms of corruption carried out by individuals, managers should consider developing and implementing reform interventions that concentrate on eliminating corrupt networks (e.g., a group of interrelated individuals that abuse their power for private or public gain) who facilitate systematic malfeasance acts. Originality/value The study is the first to operationalize the extent and form of corrupt acts and measure their impact on organizational outcomes. The results demonstrate how different variables interact to determine the effects on organizational outcomes.
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We show that political institutions affect corruption levels. We use audit reports in Brazil to construct new measures of political corruption in local governments and test whether electoral accountability affects the corruption practices of incumbent politicians. We find significantly less corruption in municipalities where mayors can get reelected. Mayors with reelection incentives misappropriate 27 percent fewer resources than mayors without reelection incentives. These effects are more pronounced among municipalities with less access to information and where the likelihood of judicial punishment is lower. Overall our findings suggest that electoral rules that enhance political accountability play a crucial role in constraining politician's corrupt behavior.
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Although people buy counterfeit products to signal positive traits, we show that wearing counterfeit products makes individuals feel less authentic and increases their likelihood of both behaving dishonestly and judging others as unethical. In four experiments, participants wore purportedly fake or authentically branded sunglasses. Those wearing fake sunglasses cheated more across multiple tasks than did participants wearing authentic sunglasses, both when they believed they had a preference for counterfeits (Experiment 1a) and when they were randomly assigned to wear them (Experiment 1b). Experiment 2 shows that the effects of wearing counterfeit sunglasses extend beyond the self, influencing judgments of other people's unethical behavior. Experiment 3 demonstrates that the feelings of inauthenticity that wearing fake products engenders-what we term the counterfeit self-mediate the impact of counterfeits on unethical behavior. Finally, we show that people do not predict the impact of counterfeits on ethicality; thus, the costs of counterfeits are deceptive.
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This paper uses publicly released audit reports to study the effects of disclosing information about corruption practices on electoral accountability. In 2003, as part of an anticorruption program, Brazil's federal government began to select municipalities at random to audit their expenditures of federally transferred funds. The findings of these audits were then made publicly available and disseminated to media sources. Using a data set on corruption constructed from the audit reports, we compare the electoral outcomes of municipalities audited before versus after the 2004 elections, with the same levels of reported corruption. We show that the release of the audit outcomes had a significant impact on incumbents' electoral performance, and that these effects were more pronounced in municipalities where local radio was present to divulge the information. Our findings highlight the value of having a more informed electorate and the role played by local media in enhancing political selection.
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We study the allocation of driver's licenses in India by randomly assigning applicants to one of three groups: bonus (offered a bonus for obtaining a license quickly), lesson (offered free driving lessons), or comparison. Both the bonus and lesson groups are more likely to obtain licenses. However, bonus group members are more likely to make extralegal payments and to obtain licenses without knowing how to drive. All extralegal payments happen through private intermediaries (“agents”). An audit study of agents reveals that they can circumvent procedures such as the driving test. Overall, our results support the view that corruption does not merely reflect transfers from citizens to bureaucrats but distorts allocation.
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This paper uses a unique data set on corruption containing quantitative information on bribe payments of Ugandan firms. The data have two striking features: not all firms report that they need to pay bribes, and there is considerable variation in reported graft across firms facing similar institutions/policies. We propose an explanation for these patterns, based on differences in control rights and bargaining strength across firms. Consistent with the control rights/bargaining hypotheses, we find that the incidence of corruption can be explained by the variation in policies/regulations across industries. How much must bribe-paying firms pay? Combining the quantitative data on corruption with detailed financial information from the surveyed firms, we show that firms' "ability to pay" and firms' "refusal power" can explain a large part of the variation in bribes across graft-reporting firms. These results suggest that public officials act as price (bribe) discriminators, and that prices of public services are partly determined in order to extract bribes. © 2001 the President and Fellows of Harvard College and the Massachusetts Institute of Technology
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In this paper, we report results from surveys in which enumerators made unannounced visits to primary schools and health clinics in Bangladesh, Ecuador, India, Indonesia, Peru and Uganda and recorded whether they found teachers and health workers in the facilities. Averaging across the countries, about 19 percent of teachers and 35 percent of health workers were absent. The survey focused on whether providers were present in their facilities, but since many providers who were at their facilities were not working, even these figures may present too favorable a picture. For example, in India, one-quarter of government primary school teachers were absent from school, but only about one-half of the teachers were actually teaching when enumerators arrived at the schools. We will provide background on education and health care systems in developing; analyze the high absence rates across sectors and countries; investigate the correlates, efficiency, and political economy of teacher and health worker absence; and consider implications for policy.
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Entertainment and Travel Costs (ETC) is a standard expenditure item for Chinese firms with an annual amount equal to about 20 percent of total wage bills. We use this objective accounting measure as a basis to analyze the composition of ETC and the effect of ETC on firm performance. We rely on the predictions from a simple but plausible model of managerial decision-making to identify components of ETC by examining how the total ETC responds to different environmental variables. In our empirical analysis we find strong evidence that firms. ETC consists of a mix that includes bribery to government officials both as %u201Cgrease money%u201D and %u201Cprotection money,%u201D expenditures to build relational capital with suppliers and clients, and managerial excesses. ETC overall has a significantly negative effect on firm performance, but its negative effect is much less pronounced for those firms located in cities with low quality government service, those who are subject to severe government expropriation, and those who do not have strong relationship with suppliers and clients. Our findings have important implications on how to effectively curb corruption.
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An important challenge in the crime literature is to isolate causal effects of police on crime. Following a terrorist attack on the main Jewish center in Buenos Aires, Argentina, in July 1994, all Jewish institutions received police protection. Thus, this hideous event induced a geographical allocation of police forces that can be presumed exogenous in a crime regression. Using data on the location of car thefts before and after the attack, we find a large deterrent effect of observable police on crime. The effect is local, with no appreciable impact outside the narrow area in which the police are deployed.
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Why is corruption-defined here as the misuse of public office for private gain-perceived to be more widespread in some countries than others? Different theories associate cross-national variation in the extent of corruption with particular historical and cultural traditions, levels of economic development, political institutions, and government policies. This article analyzes which of various plausible determinants are significantly related to several indexes of "perceived corruption" compiled from business risk surveys for the early-1980s and mid-1990s. It finds support for six arguments. Countries with Protestant traditions, histories of British rule, more developed economies, and (probably) those with high exposure to imports were rated less "corrupt". Federal states were more "corrupt" than unitary ones. While the current degree of democracy was not significant, long exposure to democracy was associated with lower corruption.
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This paper will discuss eight frequently asked questions about public corruption: (1) what is corruption; (2) which countries are the most corrupt; (3) what are the common characteristics of countries with high corruption; (4) what is the magnitude of corruption; (5) do higher wages for bureaucrats reduce corruption; (6) can competition reduce corruption;( 7) why have there been so few (recent) successful attempts to fight corruption; and (8) does corruption adversely affect growth?
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Volume Two of the International Handbook on the Economics of Corruption presents a comprehensive, detailed, and in-depth analysis of corruption as well as its economic and policy implications... It will be a valuable resource not only for experts and students of corruption studies, but also for public officials, NGO employees, and scholars of economic and political development throughout the world - Ararat L. Osipian, Journal of Economic Issues. © Susan Rose-Ackerman and Tina Søreide 2011. All rights reserved.
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We investigate empirically the determinants of the quality of governments in a large cross-section of countries. We assess government performance using measures of government intervention, public sector efficiency, public good provision, size of government, and political freedom. We find that countries that are poor, close to the equator, ethnolinguistically heterogeneous, use French or socialist laws, or have high proportions of Catholics or Muslims exhibit inferior government performance. We also find that the larger governments tend to be the better performing ones. The importance of historical factors in explaining the variation in government performance across countries sheds light on the economic, political, and cultural theories of institutions.
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A sample survey to obtain self-report alcohol consumption data from adult males in Edinburgh was conducted. Two matched half samples were assigned to a computer interview or a direct interview at random. The aims of the study were to assess the feasibility of using computer interviewing techniques in a field survey of the general population and also to ascertain whether the computer interview method would show a significant increase in the reported consumption values when compared with direct interview. The mean total consumption reported in the direct interviews was consistent with findings from other recent surveys of this demographic subgroup (Knight & Wilson, 1980; Kendell et al., 1982). The mean total consumption reported in the computer interviews was some 30% higher, a difference which remained highly significant even after controlling for other variables known to affect consumption. The percentage increase for wine and spirits at 50% was greater than that for beer (25%). These results suggest that the bias of underreporting known to exist in survey measurement of alcohol consumption may be reduced by replacing the interviewer by a computer. Further studies are required to substantiate this preliminary finding, but the potential of the methodology has been demonstrated. /// Une enquête par sondage fut conduite pour obtenir des données sur la consommation d'alcool par des mâles adultes à Edimbourg. Deux échantillons appariés furent assignés au hasard, soit à une interview par ordinateur, soit a une interview directe. La consommation totale moyenne indiquée dans les interviews directes s'accordait avec des conclusions d'autres enquêtes récentes dans ce sous-groupe démographique. La consommation totale moyenne indiquée dans les interviews par ordinateur s'avéra environ 30% plus haut, un écart qui demeurait très important même après avoir soumis les données à un contrôle pour démontrer d'autres variables quit ont une influence vérifiable sur la consommation. Ces résultats suggèrent que le problème de sous-estimation qui existe dans l'évaluation par enquête de la consommation d'alcool pouvrait être réduit en remplaçant l'interviewer par l'ordinateur.
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this paper we will be especially concerned with ratings of the performance of the central government bureaucracy. Keefer and Knack (1993) use ratings by the International Country Risk Guide (ICRG) and by Business and Environmental Risk Intelligence (BERI) of "corruption in government" and "bureaucratic delays," respectively; Mauro uses ratings by Business International (BI) of "corruption" and "bureaucracy and red tape;" and Knack and Keefer (1995) and Easterly and Levine (1996) use an ICRG rating of "bureaucratic quality" in their indices of institutional quality. Keefer and Knack find that better performance on both of their variables is positively and significantly associated with growth in per capita income, Mauro finds that better performance on both of his variables is positively and significantly associated with the private investment share of GDP, and Knack and Keefer and Easterly and Levine find positive and 2 significant effects of their institutional quality indices on growth in per capita income. While the cross-country statistical evidence reinforces the idea that differential governmental performance may have an impact on economic growth, it tells us little about what kind of institutional characteristics are associated with lower levels of corruption or red tape. If the findings just listed are meaningful, it is worth identifying which characteristics of government bureaucracies lead to good ratings from the ICRG, BERI, and BI on the variables cited above. This is our aim in the present paper. In a companion paper (Evans and Rauch 1997) we examine the direct impact of bureaucratic structure on economic performance. To achieve this aim required a major data collection effort. Although it is increasingly recognized that without the help of the central gov...
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We use data on households’ bribery of public officials in Peru and Uganda to analyze the distribution by income of the burden of bribery, the mechanisms leading to it, and the payoffs to bribery. We show the burden of bribery is not borne disproportionately by the poor. Among bribers, the poor do pay a greater share of their income than the rich, but the rich use officials more often, and among users, the rich are more likely to bribe. The benefit of bribery is avoidance of the poor service delivered to clients who refuse to bribe.
Article
Using a computer-administered interview, self-reports of past criminal behavior were obtained from 99 institutionalized sex offenders. The sample contained both rapists and child molesters who had been mandated to receive specialized treatment. Offenders disclosed an enormous amount of undetected sexual aggression, a finding consistent with other self-report studies. Also striking was the high rate and variety of nonsex offenses. According to interview responses, nearly 20,000 nonsex crimes were committed during the year prior to institutionalization, with rapists contributing a disproportionate share. Still, child molesters, including those whose only known crime was incest, were very active in assault and property crime. The potential for utilizing sex offender self-reports in empirical research is discussed. Preliminary evidence of validity is presented.
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Among scholars the subject of corruption is nearly taboo. Placing it in a model of developing economy as a developing factor is even worse in some eyes. No doubt, Nathaniel H. Leff's analysis will be misunderstood. So be it. It still bids us to understand an important area of social behavior, and tells us why public policies will fail. The author is at Harvard University.
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The major differences between face-to-face and telephone interviews as well as self-administered questionnaires are reviewed and are related to the cognitive and communicative processes assumed to underlie the process of question answering. Based on these considerations the impact of administration mode on the emergence of well-known response effects in survey measurement is discussed, and relevant experimental evidence is reported. It is concluded that administration mode affects the emergence of question order and context effects; the emergence of response order effects; the validity of retrospective reports; and the degree of socially desirable responding. The emergence of question wording and question form effects, on the other hand, appears to be relatively independent of administration mode.
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The impact of property rights on economic growth is examined using indicators provided by country risk evaluators to potential foreign investors. Indicators include evaluations of contract enforceability and risk of expropriation. Using these variables, property rights are found to have a greater impact on investment and growth than has previously been found for proxies such as the Gastil indices of liberties, and frequencies of revolutions, coups and political assassinations. Rates of convergence to U.S.-level incomes increase notably when these property rights variables are included in growth regressions. These results are robust to the inclusion of measures of factor accumulation and of economic policy.
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Why do some people choose corruption over honesty and others not? Do the social norms and values prevailing in the societies in which they grew up affect their decisions? In 2005, we conducted a bribery experiment and found that, among undergraduates, we could predict who would act corruptly with reference to the level of corruption in their home country. Among graduate students we could not. In 2007, we replicated our result and also found that time spent in the UK was associated with a decline in the propensity to bribe, although this does not explain our inability to predict graduate behaviour. We conclude that, while corruption may, in part, be a cultural phenomenon, individuals should not be prejudged with reference to their country of origin.
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This paper examines the accuracy of corruption perceptions by comparing Indonesian villagers' reported perceptions about corruption in a road-building project in their village with a more objective measure of 'missing expenditures' in the project. I find that villagers' reported perceptions do contain real information, and that villagers are sophisticated enough to distinguish between corruption in a particular road project and general corruption in the village. The magnitude of the reported information, however, is small, in part because officials hide corruption where it is hardest for villagers to detect. I also find that there are biases in reported perceptions. The findings illustrate the limitations of relying solely on corruption perceptions, whether in designing anti-corruption policies or in conducting empirical research on corruption.
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The AIDS (Acquired Immunodeficiency Syndrome) epidemic has brought increased attention to the problems investigators face in collecting highly sensitive information. In this context, literature on response bias in sex research is reviewed with particular attention to test-retest reliability and nonresponse issues. The influence of various task, interviewer, and respondent motivation variables on response bias in sex surveys is discussed. Recommendations for decreasing response bias are made. These recommendations are limited in that there is need for additional methodological studies among low socioeconomic class respondents, ethnic minorities, non-English speaking people, and other subpopulations of interest to AIDS investigators (e.g., IVDUs, prostitutes). Suggestions for accomplishing this goal are made.
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This study provides the first systematic measure of bribery using micro-level data on reported earnings, household spending and asset holdings. We use the compensating differential framework and the estimated sectoral gap in reported earnings and expenditures to identify the size of unobserved (unofficial) compensation (i.e., bribes) of public sector employees. In the case of Ukraine, we find that public sector employees receive 24-32% less wages than their private sector counterparts. The gap is particularly large at the top of the wage distribution. At the same time, workers in both sectors have essentially identical level of consumer expenditures and asset holdings that unambiguously indicate the presence of non-reported compensation in the public sector. Using the conditions of labor market equilibrium, we develop an aggregate measure of bribery and find that the lower bound estimate of the extent of bribery in Ukraine is between 460 mln and 580 mln U.S. dollars (0.9-1.2% of Ukraine’s GDP in 2003).
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The relationship between decentralization of government activities and the extent of rent extraction by private parties is an important element in the recent debate on institutional design. The theoretical literature makes ambiguous predictions about this relationship, and it has remained little studied by empiricists. In this paper, we systematically examine this issue empirically, by looking at the cross-country relationship between fiscal decentralization and corruption, as measured by a number of different indices. Our estimates suggest that fiscal decentralization in government expenditure is strongly and significantly associated with lower corruption; these results persist when decentralization is instrumented for by the origin of a country’s legal system.
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This paper examines the degree to which the corruption in developing countries may impair the ability of governments to redistribute wealth among their citizens. Specifically, I examine a large anti-poverty program in Indonesia that distributed subsidized rice to poor households. I estimate the extent of corruption in the program by comparing administrative data on the amount of rice distributed with survey data on the amount actually received by households. The central estimates suggest that, on average, at least 18% of the rice appears to have disappeared. Ethnically heterogeneous and sparsely populated areas are more likely to be missing rice. Using conservative assumptions for the marginal cost of public funds, I estimate that the welfare losses from this corruption may have been large enough to offset the potential welfare gains from the redistributive intent of the program. These findings suggest that corruption may impose substantial limitations on developing countries' redistributive efforts, and may help explain the low level of transfer programs in developing countries.
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We examine the effect of tariff policies on evasion of customs duties, in the context of the trade reform in India of the 1990s. By exploiting the variation in tariff rates across time and products, we identify a robust positive elasticity of evasion with respect to tariffs. A second contribution of the paper is to provide some evidence on the impact of enforcement. While we cannot identify the direct impact of enforcement on evasion, we can establish the extent to which enforcement-related factors, such as product characteristics that determine the ease of detection of evasion, affect the evasion elasticity. The results render support to the hypothesis that improvements in enforcement can reduce the responsiveness of evasion to tariffs.
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This paper is a report of techniques used to examine and establish translational and conceptual equivalence of survey questionnaires. A major concern arose about standardization of translated survey questionnaires, when preparing to evaluate differences in acute coronary syndrome presentation in European (White), Chinese and South Asian patients. The survey questionnaires were first translated by an accredited translation company. Between July and November 2009, materials were taken to like-speaking healthcare reviewers to ensure that the clinical meaning was appropriate. Like-speaking lay reviewers were then asked to make comment about grammar; meaning and understanding of questions; and any concerns about the suitability of graphics. A key informant from each language group reviewed all comments and worked with the investigators and the translation company to create final sets of survey questionnaires. Readability of the questionnaires (too complex or too basic) was the most common concern. A major discrepancy between ethnic groups arose about a graphic of 'squeezing' pain. A hand grasping a balloon was considered appropriate for European and South Asian groups, while a picture of a towel being wrung out was identified as more appropriate for the Chinese. There were no negative comments about the graphics. Soliciting key informants who were highly fluent in both English and the language under study was critical to ensure that the participants' feedback was appropriately reconciled. Traditional forward-backward translation of study materials is insufficient. Translation must be accompanied by a process whereby equivalence and acceptability are also established.
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This study analyzes the effects of right-wing extremism on the well-being of immigrants based on data from the German Socio-Economic Panel (SOEP) for the years 1984 to 2006 merged with state-level information on election outcomes. The results show that the life satisfaction of immigrants is significantly reduced if right-wing extremism in the native population increases. Moreover ; the life satisfaction of highly educated immigrants is affected more strongly than that of low-skilled immigrants. This supports the view that policies aimed at making immigration more attractive to the high-skilled have to include measures that reduce xenophobic attitudes in the native population. --
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This paper presents a randomized field experiment on reducing corruption in over 600 Indonesian village road projects. I find that increasing government audits from 4 percent of projects to 100 percent reduced missing expenditures, as measured by discrepancies between official project costs and an independent engineers’ estimate of costs, by eight percentage points. By contrast, increasing grassroots participation in monitoring had little average impact, reducing missing expenditures only in situations with limited free-rider problems and limited elite capture. Overall, the results suggest that traditional top-down monitoring can play an important role in reducing corruption, even in a highly corrupt environment.
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Tax evasion, by its very nature, is difficult to observe. We quantify the effects of tax rates on tax evasion by examining the relationship in China between the tariff schedule and the "evasion gap," which we define as the difference between Hong Kong's reported exports to China at the product level and China's reported imports from Hong Kong. Our results imply that a one-percentage-point increase in the tax rate is associated with a 3 percent increase in evasion. Furthermore, the evasion gap is negatively correlated with tax rates on closely related products, suggesting that evasion takes place partly through misclassification of imports from higher-taxed categories to lower-taxed ones, in addition to underreporting the value of imports.
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This paper studies the effect of corruption on foreign direct investment. The sample covers bilateral investment from twelve source countries to 45 host countries. There are two central findings. First, a rise in either the tax rate on multinational firms or the corruption level in a host country reduces inward foreign direct investment (FDI). In a benchmark estimation, an increase in the corruption level from that of Singapore to that of Mexico would have the same negative effect on inward FDI as raising the tax rate by fifty percentage points. Second, American investors are averse to corruption in host countries, but not necessarily more so than average OECD investors, in spite of the U.S. Foreign Corrupt PracticesAct of 1977. © 2000 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology
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From 1997 through 2003, the UN Oil for Food Program allowed Iraq to export oil for humanitarian supplies. We hypothesize that Iraq deliberately set the price of its oil below market prices to solicit bribes from oil buyers. By comparing the price gap between Iraqi oil and its close substitutes during the Program to the gap prior to the Program, we find evidence of significant underpricing. Our central estimate suggests that Iraq collected $1.3 billion in bribes from underpricing its oil, or 2 percent of oil revenues. Underpricing is higher during periods of high volatility in oil markets-when detection is more difficult-but declines after the UN limited Iraq's ability to set the price of its oil. Copyright by the President and Fellows of Harvard College and the Massachusetts Institute of Technology.
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According to official statistics, 20 percent of Uganda's total public expenditure was spent on education in the mid-1990s, most of it on primary education. One of the large public programs was a capitation grant to cover schools' nonwage expenditures. Using panel data from a unique survey of primary schools, we assess the extent to which the grant actually reached the intended end-user (schools). The survey data reveal that during 1991–1995, the schools, on average, received only 13 percent of the grants. Most schools received nothing. The bulk of the school grant was captured by local officials (and politicians). The data also reveal considerable variation in grants received across schools, suggesting that rather than being passive recipients of flows from the government, schools use their bargaining power to secure greater shares of funding. We find that schools in better-off communities managed to claim a higher share of their entitlements. As a result, actual education spending, in contrast to budget allocations, is regressive. Similar surveys in other African countries confirm that Uganda is not a special case.
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We develop an algorithm for detecting teacher cheating that combines information on unexpected test score fluctuations and suspicious patterns of answers for students in a classroom. Using data from the Chicago public schools, we estimate that serious cases of teacher or administrator cheating on standardized tests occur in a minimum of 4-5 percent of elementary school classrooms annually. The observed frequency of cheating appears to respond strongly to relatively minor changes in incentives. Our results highlight the fact that high-powered incentive systems, especially those with bright line rules, may induce unexpected behavioral distortions such as cheating. Statistical analysis, however, may provide a means of detecting illicit acts, despite the best attempts of perpetrators to keep them clandestine. © 2001 the President and Fellows of Harvard College and the Massachusetts Institute of Technology
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This paper presents two propositions about corruption. First, the structure of government institutions and of the political process are very important determinants of the level of corruption. In particular, weak governments that do not control their agencies experience very high corruption levels. Second, the illegality of corruption and the need for secrecy make it much more distortionary and costly than its sister activity, taxation. These results may explain why, in some less developed countries, corruption is so high and so costly to development.
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We study cultural norms and legal enforcement in controlling corruption by analyzing the parking behavior of United Nations officials in Manhattan. Until 2002, diplomatic immunity protected UN diplomats from parking enforcement actions, so diplomats' actions were constrained by cultural norms alone. We find a strong effect of corruption norms: diplomats from high-corruption countries (on the basis of existing survey-based indices) accumulated significantly more unpaid parking violations. In 2002, enforcement authorities acquired the right to confiscate diplomatic license plates of violators. Unpaid violations dropped sharply in response. Cultural norms and (particularly in this context) legal enforcement are both important determinants of corruption. (c) 2007 by The University of Chicago. All rights reserved..
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"This paper uses a microlevel data set from 49 countries to create a direct measure of corruption, which portrays the extent of bribery as revealed by individuals who live in those countries. In addition, it investigates the determinants of being asked for a bribe at the individual level. The results show that both personal and country characteristics determine the risk of exposure to bribery. Examples are gender, income, education, marital status, the city size, the country's unemployment rate, average education, and the strength of the institutions in the country. "("JEL "K4, D73 P16) Copyright (c) 2008 Western Economic Association International.
Article
We empirically analyze the illicit trade in cultural property and antiques, taking advantage of different reporting incentives between source and destination countries. We thus generate a measure of illicit trafficking in these goods based on the difference between imports recorded in United States' customs data and the (purportedly identical) trade as recorded by customs authorities in exporting countries. We find that this reporting gap is highly correlated with the corruption level of the exporting country as measured by commonly used survey-based indicies, and that this correlation is stronger for artifact-rich countries. As a placebo test, we do not observe any such pattern for U.S. imports of toys from these same exporters. We report similar results for four other Western country markets. Our analysis provides a useful framework for studying trade in illicit goods. Further, our results provide empirical confirmation that survey-based corruption indicies are informative, as they are correlated with an objective measure of illicit activity.
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This paper tests whether the behavior of corrupt officials is consistent with standard industrial organization theory. We designed a study in which surveyors accompanied Indonesian truck drivers on 304 trips, during which they observed over 6,000 illegal payments to police, soldiers, and weigh station attendants. Using plausibly exogenous changes in the number of checkpoints, we show that market structure affects the level of illegal payments. We further show that corrupt officials use complex pricing schemes, including third-degree price discrimination and a menu of two-part tariffs. Our findings illustrate the importance of considering the market structure for bribes when designing anticorruption policy.
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Clusters, as spatial concentrations of economic activity, constitute an important form of coordination with significant repercussions in the configuration of firm and territorial strategies. They are recognized, both by academics and policymakers, as a territorial pattern of economy yielding critical issues in terms of competitive advantage, innovation, and economic growth. Despite that, a rigorous and clear-cut definition of cluster is still far from being reached. In the present paper, resorting to a critical synthesis of the literature on networks and clusters, we propose a unified, encompassing, and less blurred definition of cluster.
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Although the theoretical literature on corruption is well developed, empirical work in this area has lagged because it has proven difficult to isolate corrupt behavior in the data. In this paper, we look for evidence of corruption in an unlikely place: the highest echelons of Japanese sumo wrestling. This paper provides strong statistical evidence documenting match rigging in sumo wrestling. A non-linearity in the incentive structure of promotion leads to gains from trade between wrestlers on the margin for achieving a winning record and their opponents. We show that wrestlers win a disproportionate share of the matches when they are on the margin. Increased effort can not explain the findings. Winning on the bubble is more frequent when the two competitors have met often in the past. Success on the bubble tends to rise over the course of a wrestler's career, but declines in his last year, consistent with the game theoretic predictions. Wrestlers who are victorious when on the bubble lose more frequently than would be expected the next time they meet that opponent, suggesting that part of the payment for throwing a match is future payment in kind. Systematic differences across wrestling stables suggest that the stables play a role in facilitating the corruption. In times of increased media scrutiny, the match rigging disappears.
Article
As the Indonesian economy went into a downward spiral in the latter half of 1997, there was much speculation and debate as to the reasons behind the sudden decline. Most explanations gave at least some role to investor panic, which had led to a massive outflow of foreign capital. At the root of this hysteria, however, were concerns that the capital that had flowed into Indonesia and elsewhere in Southeast Asia had not been used for productive investments. Much of this discussion focused on the role of political connections in driving investment. The claim was that in Southeast Asia, political connectedness, rather than fundamentals such as productivity, was the primary determinant of profitability and that this had led to distorted investment decisions. Obviously, the degree to which this type of problem was truly responsible for the Asian collapse depends very much on the extent to which connectedness really was a primary determinant of firm value. In making the argument that this was in fact the case, anecdotes about the business dealings of President Suharto’s children were often cited as evidence. Such stories suggest that the value of some firms may have been highly dependent on their political connections. However, investigations in this area have not progressed beyond the level of case study and anecdote. That is, there has been no attempt to estimate the degree to which firms rely on connections for their profitability. There are numerous difficulties that would
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An emerging literature has demonstrated some unique characteristics of trade in differentiated products. This paper contributes to the literature by postulating that differentiated products may be subject to greater tariff evasion due to the difficulties associated with assessing their quality and price. Using product-level data on trade between Germany and 10 Eastern European countries during 1992-2003, we find empirical support for this hypothesis. We show that the trade gap, defined as the discrepancy between the value of exports reported by Germany and the value of imports from Germany reported by the importing country, is positively related to the level of tariff in 8 out of 10 countries. Further, we show that the responsiveness of the trade gap to the tariff level is greater for differentiated products than for homogenous goods. A one-percentage-point increase in the tariff rate is associated with a 0.4% increase in the trade gap in the case of homogenous products and a 1.7% increase in the case of differentiated products. Finally, the data indicate that while underreporting of quantities takes place for all products, only differentiated products are subject to misrepresentation of the import prices. There is no evidence of tariff evasion taking place through product misclassification.
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In this paper, I present empirical evidence for …ve European countries (Germany, France, UK, Spain and Italy) and the Euro-zone on whether monetary policy shocks produce di¤erent e¤ects on real output growth depending on the phase of the business cycle that the economy is undergoing (the socalled ‘state’ asymmetry). To do so, I apply a multivariate extension of the Hamilton(1989)’s Markov switching methodology. I …nd evidence in favour of ‘state’ asymmetries at the aggregate level in all the countries whereby interest-rate shocks have larger e¤ects in recessions than in expansions. I also carry out the analysis at the sectorial level and observe that this asymmetric effect seems to be di¤erent in the analysed countries when I focus on a sectorial analysis.
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Additional discussions of transfers have pointed out that they are essentially costless to society as a whole. This article discusses the investment of resources in obtaining transfers or attempting to avoid transfers away from ego. In any situation in which transfers are likely, it must be assumed that profit-seeking individuals will invest resources in attempting to get them or prevent them, if the transfer is away from some individual. The problem is discussed in the areas of voluntary charity, bargaining, governmental income redistribution, theft, and war.
Article
Which of the democratic checks and balances – opposition parties, the judiciary, a free press – is the most critical? Peru has the full set of democratic institutions. In the 1990s, the secret-police chief Montesinos systematically undermined them all with bribes. We quantify the checks using the bribe prices. Montesinos paid television-channel owners about 100 times what he paid judges and politicians. One single television channel’s bribe was four times larger than the total of the opposition politicians’ bribes. By revealed preference, the strongest check on the government’s power was the news media.