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Causes of Corruption: History, Geography, and Government

33 Pages Posted: 10 Jun 2008  

Rajeev K. Goel

Illinois State University - Department of Economics

Michael A. Nelson

University of Akron - Department of Economics

Date Written: May 25, 2008

Abstract

Corruption, which remains a serious problem in many countries, has prompted considerable research in recent years. This paper adds to the extant literature with insights on factors influencing corrupt activity. Using cross-country data for about 100 nations, the roles of national history, geography, and government are examined to see how they affect conditions for corruption, both qualitatively and quantitatively. The innovative aspects of this research include use of a wide set of historical, geographical, and governmental determinants of corruption, as well as detailed assessment of several previously considered determinants. The main issues addressed are the effects of the size and scope of government on the incidence of corruption across countries, and the significance of historical and geographic factors in corruption. Regarding the first question, the authors find the size and scope of government can significantly affect corruption. On the second, it is shown that historical institutional inertia in older countries and new rent-seeking opportunities in younger nations can encourage corruption, while certain geographic factors can mitigate corruption. The paper ends with discussion aimed at the policymaker.

Keywords: corruption, bribery, government size, government scope, rent-seeking, history, geography

JEL Classification: H0, P0

Suggested Citation

Goel, Rajeev K. and Nelson, Michael A., Causes of Corruption: History, Geography, and Government (May 25, 2008). BOFIT Discussion Paper No. 6/2008. Available at SSRN: https://ssrn.com/abstract=1141772 or http://dx.doi.org/10.2139/ssrn.1141772

Rajeev K. Goel (Contact Author)

Illinois State University - Department of Economics ( email )

Normal, IL 61790-4200
United States

Michael A. Nelson

University of Akron - Department of Economics ( email )

Akron, OH 44325
United States
330-972-7939 (Phone)
330-972-5356 (Fax)

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