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RECENT RESEARCH ON CORRUPTION

RECENT RESEARCH ON CORRUPTION. Omer Gokcekus, Seton Hall University Claremont Workshop on Political Economy Data and Analysis. 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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RECENT RESEARCH ON CORRUPTION

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  1. RECENT RESEARCH ON CORRUPTION Omer Gokcekus, Seton Hall University Claremont Workshop on Political Economy Data and Analysis October 7, 2005 - Claremont, CA - Gokcekus

  2. Agenda • Overview • Research Area 1: Consequences of Corruption • Research Area 2: Causes of Corruption • Research Area 3: Reforms to eradicate Corruption • Issues October 7, 2005 - Claremont, CA - Gokcekus

  3. Overview • Using public office for private gain • Symptom of political system’s failure to mediate between private wealth and public power • International organizations are pushing for reforms to eradicate it October 7, 2005 - Claremont, CA - Gokcekus

  4. Research Area 1:Consequences 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) October 7, 2005 - Claremont, CA - Gokcekus

  5. Research Area 2:Causes 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; … October 7, 2005 - Claremont, CA - Gokcekus

  6. Research Area 3:Eradicating Corruption • Stages in anti-corruption efforts (Klitgaard, 2000): • raising consciousness about corruption’s 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 October 7, 2005 - Claremont, CA - Gokcekus

  7. 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? October 7, 2005 - Claremont, CA - Gokcekus

  8. 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) October 7, 2005 - Claremont, CA - Gokcekus

  9. 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) October 7, 2005 - Claremont, CA - Gokcekus

  10. 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 declaration’s content (5) the details of the declaration’s processing (6) the punishment for breach (7) whether or not there is public access to declarations (The World Bank – PREM project—in-progress) October 7, 2005 - Claremont, CA - Gokcekus

  11. Average CPI in this group 4.0 3.71 3.54 3.5 3.14 3.0 2.86 2.5 Public access 2.0 No public access Prosecuted Not prosecuted Current Issue … Public sector—Declaration of assets and liabilities laws (Godet & Gokcekus, 2005) October 7, 2005 - Claremont, CA - Gokcekus

  12. Average CPI in this group 5 4.4 4 3.5 4 3.2 3 3 2 Directions both for officials & supervisors Directions for officials but not for supervisors Directions neither for officials nor for supervisors Public sector—Conflict of interest laws (Godet & Gokcekus, 2005) October 7, 2005 - Claremont, CA - Gokcekus

  13. Current Issue … • Is reform targeting a specific public organization? • Are incentives and institutional arrangements homogenous within a country’s public sector? • Is there one representative official in a public organization? October 7, 2005 - Claremont, CA - Gokcekus

  14. Current Issue … Mukherjee, Gokcekus, Manning, Pierre Landell-Mills, 2001 October 7, 2005 - Claremont, CA - Gokcekus

  15. Current Issue … • Is reform targeting a specific public organization? • Are incentives and institutional arrangements homogenous within a country’s public sector? • Is there one representative official in a public organization? October 7, 2005 - Claremont, CA - Gokcekus

  16. Current Issue … Godet and Gokcekus, 2005 October 7, 2005 - Claremont, CA - Gokcekus

  17. Current Issues … • How will we assess the effectiveness of different reform attempts? (No consistent time series: no benchmark; no direct way to assess the cost—before 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 • ??? • … October 7, 2005 - Claremont, CA - Gokcekus

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