Corruption and the size of government: causality tests for OECD and Latin American countries

The purpose of this article is to examine the causality between government size and corruption, and to verify if there is a different pattern of causality between developed Organization for Economic Co-operation and Development (OECD) countries (excluding Mexico) and developing countries (Latin American countries) during the period 1996 to 2003. Applying Granger and Huang`s (1997) methodology we find evidence that size of government Granger causes corruption in both samples. Since a larger government involvement in private markets today will be followed in future by a higher level of corruption a policy advice would be to enhance governance. The promotion of good governance helps to combat corruption given that it complements efforts to reduce corruption more directly, and it is strongly recommended by the International Monetary Fund, other multilateral institutions, and all worried with the negative impacts of corruption on economic activity.

Corruption and auctions

We investigate how corruption affects the outcome of a first-price auction (bidding behavior, efficiency and the seller's expected revenue). The auctioneer approaches the winner to offer the possibility of a reduction in his bid in exchange for a bribe. The bribe can be a percentage of the difference between the winning and the second-highest bid or a fixed amount. We show that there exists a symmetric bidding strategy equilibrium that is monotone, i.e., higher valuation buyers bid higher. Corruption does not affect efficiency but both the auctioneer's expected bribe and the seller's expected revenue depend on the format of the bribe payments. We also find the optimal bribe scheme.

Cultural Specific Training in Corruption Reporting for Pacific Island Journalists

Notes that very few journalists have formal training in corruption reporting. Discusses workshops held in 2000 and 2001 on the subject of corruption reporting for Pacific Island journalists. Explains the role of the media as an anti-corruption mechanism and the difficulty journalists face in identifying and sometimes stamping out corruption. Looks at the programs adopted and explains the responses of journalists.

Does corruption inhibit foreign direct investment?

Globalization creates new opportunities for firms to invest abroad and many economies are making active efforts to attract Foreign Direct Investment (FDI) in order to promote economic growth. Decisions to invest abroad depend on a complex set of factors, but the least corrupt countries may attract more foreign direct investment because they provide a more favorable climate for investors. In this paper we investigate the impact of corruption on FDI inflows in 73 countries, over the period 1998-2008. Our results suggest that countries where corruption is lower, the FDI inflows are greater, and so controlling corruption may be an important strategy for increase FDI inflows.

��Corruption�� and social and economic criminal law: criminology, criminal policy, political science and law&economics - a new idea about criminal liability of legal entities

Abstract: If we think there is a significant number of legal offshore in the globalized world, then there is not even a global consensus about what ��corruption�� is. The ��illegal corruption�� in a country may be legal in another. Moreover, the great global corruption is above the law or above democratic States. And not all democratic States are ��Rule of Law��. Therefore, the solution is global earlier in time and space law, democratic, free and true law. While the human being does not reach a consensus of what ��corruption�� really is, the discussion will not go further than a caricature. One of the other problems about ��corruption�� is that it is very difficult to establish the imputation of crimes, including ��corruption�� (v.g. Portugal) on some ��companies��, corporations. We have a juridical problem in the composition of the art. 11. of the Portuguese Penal Code.

The political economy of corruption in Brazil

This article is the first part of a research on corruption in Brazil and it is theoretical. Despite this, it provides an economic interpretation of corruption using Brazil as a case study. The main objective of this research is to apply some microeconomic tools to understand the "big corruption"��. However, I am going to show that corruption is not simply a kind of crime. Rather, it is an ordinary economic activity that arises in some institutional environments. Firstly, some corruption cases in Brazil will be described. This article is aimed at showing that democracy itself does not ensure control over corruption. Secondly, I am going to do a very brief survey of institutional changes and controls over corruption in some Western Societies in which I am going to argue that corruption, its control and its illegality depend on institutional evolution by streamlining the constitutional and institutional framework. Thirdly, I am going to explain how some economic models could be adopted for a better understanding of corruption. Finally, I will present a multiple-self model applied to the public agent (politician and bureaucrat) constrained by institutions and pay-off systems.

Does corruption inhibit foreign direct investment?

Globalization creates new opportunities for firms to invest abroad and many economies are making active efforts to attract Foreign Direct Investment (FDI) in order to promote economic growth. Decisions to invest abroad depend on a complex set of factors, but the least corrupt countries may attract more foreign direct investment because they provide a more favorable climate for investors. In this paper we investigate the impact of corruption on FDI inflows in 73 countries, over the period 1998-2008. Our results suggest that countries where corruption is lower, the FDI inflows are greater, and so controlling corruption may be an important strategy for increase FDI inflows.

Does corruption drive the stock market?

A Work Project, presented as part of the requirements for the Award of a Masters Degree in Economics from the NOVA ��� School of Business and Economics

Corruption and Education: Empirical evidence from cross-country micro-data

A Work Project, presented as part of the requirements for the Award of a Masters Degree in Economics from the NOVA ��� School of Business and Economics

Corruption: Who pays for the bill?

This paper intends to study who pays for corruption in Brazil from 2005 to 2011. Politicians may decide to charge the spillovers of corruption at a municipal level through taxes or to charge it to the entire country through voluntary transfers. The used measure of corruption is based on audit reports conducted on randomly selected municipalities from 2005 to 2011.In order to address this question an IV strategy was computed using as instrument for the number of observed cases of corruption the dummy variable of being audited or not. We evaluated the impact of corruption on taxes and on voluntary transfers and concluded that with an increase in the number of observed cases of corruption the first decreases and the latest registers an increase. Therefore, considering all Brazilian municipalities, mayors prefer to spread the bill all over the country than charging it locally.

Market value of corruption

This paper studies the impact of the Brazilian anticorruption legislation, PL 6826/2010, on stock returns. I show that, around the law approval date, the greater the link between the corporate and political worlds, the worse is the companies��� performance. Companies awarded with public contracts in 2012 suffer more with the new legislation approval. Firms with above median contract values have 2.9% lower returns than its peers. The negative effect is more pronounced for bigger and more complex entities, associated with higher levels of Corporate Responsibility and Governance and not subject to the US FCPA.

Colonialism, Elite Formation and Corruption

This paper argues that corruption in developing countries has deep historical roots; going all the way back to the characteristics of their colonial experience. The degree of European settlement during colonial times is used to dfferentiate between types of colonial experience, and is found to be a powerful explanatory factor of present-day corruption levels. The relationship is non-linear, as higher levels of European settlement resulted in more powerful elites (and more corruption) only as long as Europeans remained a minority group in the total population.