The Determinants of Cross-Border Corruption

38 Pages Posted: 12 Sep 2016 Last revised: 20 Nov 2019

See all articles by Laarni Escresa

Laarni Escresa

European University Institute - Robert Schuman Center for Advanced Studies; University of the Philippines, Diliman - School of Economics

Lucio Picci

University of Bologna - Department of Economics; Institute for Corruption Studies

Date Written: November 19, 2019

Abstract

We reconsider the question of what determines corruption at the cross-national level, using new data and methods. Unlike previous studies that rely on perception or survey-based data that have been the subject of criticisms, we employ a new dataset of observed cases of cross-border graft, where a firm headquartered in a country bribes public officials in another foreign country. We find that economic development and a small population is associated with lower levels of corruption, as are freedom of the press, political rights, the presence of established democratic institutions, the salience of women’s role in society, and low exports of natural resources such as oil.

The particular structure of the data also allows for the first time to consider the “relational aspects” of corrupt relationships, which come to the fore when parties to the corrupt transaction, the briber and the bribee, reside in different countries. Overall, we find limited evidence that the relational factors that we consider affect corruption, beyond the effects that they often have on bilateral trade.

Keywords: Corruption, determinants of corruption, international corruption, FCPA

JEL Classification: H11, H50, D73, C18, C43, F53, F55

Suggested Citation

Escresa, Laarni and Escresa, Laarni and Picci, Lucio, The Determinants of Cross-Border Corruption (November 19, 2019). Available at SSRN: https://ssrn.com/abstract=2836895 or http://dx.doi.org/10.2139/ssrn.2836895

Laarni Escresa

University of the Philippines, Diliman - School of Economics ( email )

Encarnacion Hall
F. M. Guerrero corner S. Osmena Sts
U.P. Diliman, Quezon City
Philippines

European University Institute - Robert Schuman Center for Advanced Studies ( email )

Fiesole, Tuscany
Italy

Lucio Picci (Contact Author)

University of Bologna - Department of Economics ( email )

Strada Maggiore 45
Bologna, 40125
Italy

Institute for Corruption Studies

Stevenson Hall 425
Normal, IL 61790-4200
United States

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