We use a newly assembled indicator of corruption from Varieties of Democracy (V-Dem) to examine the effects of corruption on economic growth. The V-Dem indicator is coded for almost all contemporary and historical polities since the year 1900 and, for some countries, since the French Revolution. This global dataset allows us to exploit long-run, slow-moving variation within countries for identification, circumventing many of the difficulties faced by previous studies based on cross-section data or short panels. We present robust evidence of a negative effect of corruption on steady-state growth. Yet, we find that corruption interacts with political regime type, giving rise to heterogeneous effects. In particular, corruption is found to be significantly more deleterious for growth in democracies than in autocracies. Since corruption tends to be decentralised in democracies and centralised in autocracies, these findings are in line with theories of the ‘industrial organisation’ of corruption. We find little to no evidence that institutional weaknesses along other dimensions (state capacity, regulatory quality, property rights protection) make corruption any less harmful for growth, casting doubt on the thesis that corruption may ‘grease the wheels’ of dysfunctional institutions. Our findings provide a rationale to target anti-corruption efforts to young democracies.

Uberti, L. (2022). Corruption and Growth: Historical Evidence, 1790-2010. JOURNAL OF COMPARATIVE ECONOMICS, 50(2), 321-349 [10.1016/j.jce.2021.10.002].

Corruption and Growth: Historical Evidence, 1790-2010

Uberti, LJ
2022

Abstract

We use a newly assembled indicator of corruption from Varieties of Democracy (V-Dem) to examine the effects of corruption on economic growth. The V-Dem indicator is coded for almost all contemporary and historical polities since the year 1900 and, for some countries, since the French Revolution. This global dataset allows us to exploit long-run, slow-moving variation within countries for identification, circumventing many of the difficulties faced by previous studies based on cross-section data or short panels. We present robust evidence of a negative effect of corruption on steady-state growth. Yet, we find that corruption interacts with political regime type, giving rise to heterogeneous effects. In particular, corruption is found to be significantly more deleterious for growth in democracies than in autocracies. Since corruption tends to be decentralised in democracies and centralised in autocracies, these findings are in line with theories of the ‘industrial organisation’ of corruption. We find little to no evidence that institutional weaknesses along other dimensions (state capacity, regulatory quality, property rights protection) make corruption any less harmful for growth, casting doubt on the thesis that corruption may ‘grease the wheels’ of dysfunctional institutions. Our findings provide a rationale to target anti-corruption efforts to young democracies.
Articolo in rivista - Articolo scientifico
Corruption; Democracy; Economic growth; Types of corruption; ‘Grease the wheels’ thesis;
English
2-nov-2021
2022
50
2
321
349
reserved
Uberti, L. (2022). Corruption and Growth: Historical Evidence, 1790-2010. JOURNAL OF COMPARATIVE ECONOMICS, 50(2), 321-349 [10.1016/j.jce.2021.10.002].
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/10281/446599
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