RECENT RESEARCH ON CORRUPTION

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RECENT RESEARCH ON CORRUPTION

• Omer Gokcekus, Seton Hall University
• Claremont Workshop on Political Economy Data and
  Analysis

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Agenda

• Overview
• Research Area 1 Consequences of Corruption
• Research Area 2 Causes of Corruption
• Research Area 3 Reforms to eradicate Corruption
• Issues

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Overview

• Using public office for private gain
• Symptom of political systems failure to mediate
  between private wealth and public power
  
• International organizations are pushing for
  reforms to eradicate it

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Research Area 1Consequences of Corruption

• Economic growth (Treisman, 00 Wei, 00 Sandholtz
  and Koetzle, 00 Chowdhury, 04)
  
• Capital inflows and FDI (Mauro, 95 Wei 00
  Lambsdorff, 03a)
  
• Productivity, effectiveness of industrial
  policies (Ades Di Tella, 97 Lambsdorff, 03b)
  
• Investment in human capital vs infra-structure
  (Mauro 97 Tanzi Davoodi, 02 Esty Porter,
  02)
  
• Income distribution (Gupta, Davoodi, and
  Alonso-Terme, 02)
  
• Tax Collection (Uslaner, 03)
• Firms sales growth (Batra, Kaufmann, Stone, 03)

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Research Area 2Causes of Corruption

• Income (Mauro, 95 La Porta et al., 99 Sandholtz
  and Koetzle, 00 Treisman, 00 Wei, 00 Ali and
  Isse, 03 Park 03)
  
• Openness (Krueger, 74 Gatti, 99 Ades and di
  Tella, 99 Wei, 00 Benaglia, de Macedo and
  Bussolo, 01 Islam and Montenegro, 02)
  
• Region (Wei 00, Treisman, 00)
• Ethnic diversity (Mauro, 95 Porta et al., 99
  Ali and Isse, 03)
  
• Religion, i.e., protestant (LA Porta et al, 99
  Treisman, 00)
  
• Colonial Past (Treisman, 00 Islam and
  Montenegro, 02)
  
• Press freedom and democracy (Chowdury, 04
  Brunetti and Weder, 03 Islam and Montenegro,
  02)
  
• Gender (Dollar, Fisman, Gatti, 01 Swamy, Knack,
  Lee, Azfar, 01)
  
• Foreign aid (Tavares, 03)
• New ones federalism fiscal decentralization
  size of a country primary good exports economic
  freedom education antitrust laws

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Research Area 3Eradicating Corruption

• Stages in anti-corruption efforts (Klitgaard,
  2000)
  
• raising consciousness about corruptions
  existence and potential harm
  
• adding systems analysis to consciousness-raising
  measures
  
• subverting corruption
• Options for addressing corruption (Susan
  Rose-Ackerman (2004)
  
• voice and accountability
• procurement reforms
• tax reforms
• changes in systems of business regulation
• international efforts to limit high-level
  corruption in business

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What are the current issues?

• Are the proxies appropriate?
• Do we know the magnitude/size of corruption
  cost?
  
• Do we have a benchmark (or time series) for
  corruption?
  
• Is country the right unit of analysis?
• Or public sector?
• Declaration of assets and liabilities laws
• Conflict of interest laws
• Freedom of information laws
• Or public organizations?
• Group dynamics
• Organizational architecture
• Are we covering all dimensions of corruption?
• How about regional integration and corruption?
  Race-to-bottom or top?

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Current Issue

• Are Proxies Appropriate?
• e.g. Openness
• Both the quality and the level of openness have
  significant negative impacts on corruption
  
• (Gokcekus and Knoerich, 2005, Economics Letters,
  accepted)
  
• e.g., Religion or Protestant
• Protestant levels of 100 years ago have a greater
  negative effect on corruption, as opposed to
  modern-day percentages
  
• (Gokcekus and Gardner, work-in-progress)

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Current Issue

• Is corruption quantifiable?
• Quantified administrative corruption in the
  Albanian public sector by using a human capital
  earnings equation.
  
• Preliminary regression results Administrative
  corruption was on average 278 of officials
  current salary.
  
• Gokcekus and Muedin (work-in-progress)

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Current Issue

• Is reform targeting entire public sector?
• e.g., Declaration of assets and liabilities laws
• (1) the date of implementation and whether there
  is a constitutional mandate
  
• (2) the coverage, i.e., who must file a
  declaration
  
• (3) the filing frequency
• (4) the specificity of the declarations content
• (5) the details of the declarations processing
• (6) the punishment for breach
• (7) whether or not there is public access to
  declarations
  
• (The World Bank PREM projectin-progress)

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Current Issue Public sectorDeclaration of
assets and liabilities laws (Godet Gokcekus,
2005)
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Public sectorConflict of interest laws (Godet
Gokcekus, 2005)
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Current Issue

• Is reform targeting a specific public
  organization?
  
• Are incentives and institutional arrangements
  homogenous within a countrys public sector?
  
• Is there one representative official in a public
  organization?

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Current Issue Mukherjee, Gokcekus, Manning,
Pierre Landell-Mills, 2001
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Current Issue

• Is reform targeting a specific public
  organization?
  
• Are incentives and institutional arrangements
  homogenous within a countrys public sector?
  
• Is there one representative official in a public
  organization?

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Current Issue Godet and Gokcekus, 2005
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Current Issues

• How will we assess the effectiveness of different
  reform attempts? (No consistent time series no
  benchmark no direct way to assess the
  costbefore and after the reform)
• Are we missing some important issues?
• e.g., Regional integration race-to-bottom or
  top
  
• e.g., Different types of foreign aid and
  corruption
  
• ???