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Corruption Around the World: Evidence from a Structural Model

31 Pages Posted: 13 Jul 2004  

Axel Dreher

University of Heidelberg

Christos Kotsogiannis

University of Exeter

Steve McCorriston

University of Exeter

Date Written: June 8, 2004

Abstract

The causes and consequences of corruption have attracted much attention in recent years by both academics and policy makers. Central in the discussion on the impact of corruption are perception-based indices. While informative, these indices are ordinal in nature and hence provide no indication of how much economic loss is attributed to corruption. Arguably, this shortcoming is rooted in the lack of a structural model. This is the issue addressed in this paper. By treating corruption as a latent variable that is directly related to its underlying causes, a cardinal index of corruption is derived for approximately 100 countries. This allows us to compute a measure of the losses due to corruption as a percentage of GDP per capita.

Keywords: Corruption, Latent Variables, Economic Development, Rule of Law

JEL Classification: H10, O1, K49, C39

Suggested Citation

Dreher, Axel and Kotsogiannis, Christos and McCorriston, Steve, Corruption Around the World: Evidence from a Structural Model (June 8, 2004). Available at SSRN: https://ssrn.com/abstract=555946 or http://dx.doi.org/10.2139/ssrn.555946

Axel Dreher

University of Heidelberg ( email )

Grabengasse 1
Heidelberg, 69117
Germany

HOME PAGE: http://www.axel-dreher.de

Christos Kotsogiannis

University of Exeter ( email )

Exeter EX4 4QX, Devon
United Kingdom

Steve McCorriston (Contact Author)

University of Exeter ( email )

Exeter EX4 4QX, Devon
United Kingdom

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