Does the Evidence on Corruption Depend on How it is Measured? Results from a Cross Country Study on Micro Data Sets

27 Pages Posted: 10 Oct 2009

See all articles by Ishita Chatterjee

Ishita Chatterjee

University of Western Australia

Ranjan Ray

Monash University - Department of Economics

Abstract

This paper provides micro econometric evidence on the factors that influence an individual’s or a firm’s vulnerability to receiving bribe demands. While much of the existing literature on corruption looks at the effect of corruption on macro variables such as growth rates and income distribution, this study provides a departure by focussing on victims of corruption by attempting to profile an individual or firm that is particularly vulnerable to bribe demands. This is done using micro data at the level of individuals and business units from, respectively, the International Crime Victim Surveys (ICVS) and the World Bank Enterprise Surveys (WBES). These data sets are supplemented by country level information from a variety of sources. The study finds that the proportion of individuals facing corruption is consistently lower than that of firms in business transactions, with the gap between the two forms of corruption closing only for high income countries. A comparison of individual and business corruption reveals some interesting similarities and differences between the determinants of the two forms of bribe victimisation. The strengthening of trust, whether via improved literacy and development of social networks or via a strong legal system, and an effective and transparent regulatory mechanism is the key to combating both forms of corruption.

Keywords: Corruption Victimisation, Rule of Law, Human Development Index, Trust, Literacy rate

JEL Classification: C13, D03, D73, D78

Suggested Citation

Chatterjee, Ishita and Ray, Ranjan, Does the Evidence on Corruption Depend on How it is Measured? Results from a Cross Country Study on Micro Data Sets. Australian Conference of Economists 2009 Paper. Available at SSRN: https://ssrn.com/abstract=1485866 or http://dx.doi.org/10.2139/ssrn.1485866

Ishita Chatterjee (Contact Author)

University of Western Australia ( email )

35 Stirling Highway
Crawley, Western Australia 6009
Australia
61 8 64885654 (Phone)
61 8 64881016 (Fax)

HOME PAGE: http://www.uwa.edu.au/people/ishita.chatterjee

Ranjan Ray

Monash University - Department of Economics ( email )

Wellington Road
Clayton, Victoria 3
Australia

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