Kiel Working Papers, Kiel Institute for World Economics
No 1411:
The Transition of Corruption: From Poverty to Honesty
Erich Gundlach and Martin Paldam
Abstract: Measures of corruption and income are highly correlated
across countries. We use prehistoric measures of biogeography as
instruments for modern income levels to identify an exogenous long-run
income effect. We find that our corruption-free incomes explain the
cross-country pattern of corruption just as well as actual incomes. This
result suggests that the long-run causality is exclusively from income to
corruption. As countries get rich, corruption vanishes and there is a
transition of corruption from poverty to honesty
Keywords: Long-run growth, Corruption, Biogeography; (follow links to similar papers)
JEL-Codes: B25,; O1; (follow links to similar papers)
8 pages, March 2008
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