Corruption and Development: A Test for Non-Linearities

University of Nottingham Research Paper No. 2005/25

27 Pages Posted: 6 Dec 2005

See all articles by M. Emranul Haque

M. Emranul Haque

University of Nottingham

Richard Kneller

University of Nottingham

Date Written: 2005

Abstract

Using different combinations of culture, development and openness to international trade, we test the variability in the incidences of corruption at different stages of development or in other words the non-linearities in the relationship between corruption and development. We employ formal threshold model developed by Hansen (2000), and unlike the existing literature, we find that: (1) non-linear models that search for the break points in the relationship between corruption and development are statistically preferable than linear regressions; (2) the effect of development at any stage is much lower than that has been suggested by studies using linear regressions approach; (3) both culture and openness do not affect corruption directly; rather they have an effect on the location of break points in the relationship between corruption and development.

Keywords: Corruption, Development, Culture, Openness, Non-linearity

JEL Classification: D73, H26, O11

Suggested Citation

Haque, Mohammad Emranul and Kneller, Richard, Corruption and Development: A Test for Non-Linearities (2005). University of Nottingham Research Paper No. 2005/25. Available at SSRN: https://ssrn.com/abstract=863844 or http://dx.doi.org/10.2139/ssrn.863844

Mohammad Emranul Haque (Contact Author)

University of Nottingham ( email )

University Park
Nottingham, NG8 1BB
United Kingdom

Richard Kneller

University of Nottingham ( email )

University Park
Nottingham, NG8 1BB
United Kingdom

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