Causes and Consequences of Corruption: An Overview of Empirical Results
IW-Report No. 2 25. January 2017 Dominik Enste / Christina Heldman Causes and Consequences of Corruption: An Overview of Empirical Results
Corruption is a main threat in many countries around the world. Therefore, the causes and consequences of corruption are analyzed in various empirical studies. Since the results are quite mixed, we have summarized the findings of the central empirical literature from the last two decades for a comprehensive overview.
Dominik Enste / Christina Heldman German Economic Institute (IW)
Corruption is a main threat in many countries around the world. Therefore, the causes and consequences of corruption are analyzed in various empirical studies. Since the results are quite mixed, we have summarized the findings of the central empirical literature from the last two decades for a comprehensive overview.
Main causes for corruption are according to the studies (1) the size and structure of governments, (2) the democracy and the political system, (3) the quality of institutions, (4) economic freedom/ openness of economy, (5) salaries of civil service, (6) press freedom and judiciary, (7) cultural determinants, (8) percentage of women in the labor force and in parliament (9) colonial heritage and (10) the endowment of natural resources. Corruption has an impact on (1) investment in general, (2) foreign direct investment and capital inflows, (3) foreign trade and aid, (4) official growth, (5) inequality, (6) government expenditure and services, and (7) shadow economy and crime.
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