The Economic Effect of Corruption in Italy: A Regional Panel Analysis
Regional Studies, 51(9): 1387-1398, 2017, DOI: 10.1080/00343404.2016.1184244
Posted: 23 Feb 2015 Last revised: 30 Oct 2017
This paper provides a within-country analysis of the impact of corruption on economic growth using a panel of Italian regions from 1968 to 2011 through a robust measure of corruption. This measure is averaged over five-year periods to reduce short-run fluctuations and probable delayed effects. The results show a significant negative impact of corruption on long-term growth in all specifications, both on average and for each Italian region. As a consequence, a zero level of corruption is growth maximizing. This effect is non-linear such that the negative impact of corruption on growth becomes less intense as corruption increases.
Keywords: corruption, economic growth, cross-regional analysis, dynamic panel data.
JEL Classification: D73; K4; O10; R11.
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