BOFIT Discussion Papers, Institute for Economies in Transition, Bank of Finland
No 6/2008:
Causes of Corruption:History, Geography, and Government
Rajeev K. Goel ()
and Michael A. Nelson
Abstract: Corruption, which remains a serious problem in many
countries, has prompted considerable research in recent years. This paper
adds to the extant literature with insights on factors influencing corrupt
activity. Using cross-country data for about 100 nations, the roles of
national history, geography, and government are examined to see how they
affect conditions for corruption, both qualitatively and quantitatively.
The innovative aspects of this research include use of a wide set of
historical, geographical, and governmental determinants of corruption, as
well as detailed assessment of several previously considered determinants.
The main issues addressed are the effects of the size and scope of
government on the incidence of corruption across countries, and the
significance of historical and geographic factors in corruption. Regarding
the first question, the authors find the size and scope of government can
significantly affect corruption. On the second, it is shown that historical
institutional inertia in older countries and new rent-seeking opportunities
in younger nations can encourage corruption, while certain geographic
factors can mitigate corruption. The paper ends with discussion aimed at
the policymaker.
Keywords: corruption; bribery; government size; government scope; rent-seeking; history; geography; (follow links to similar papers)
JEL-Codes: H00; P00; (follow links to similar papers)
33 pages, June 6, 2008
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