Ferenc Szucs, 19 April 2018

Rui Esteves, Gabriel Geisler Mesevage, 06 April 2018

The social costs of corruption in government have made policies to reduce it a priority. This column uses the example of the expansion of the British rail network in the 1840s to show that conflict-of-interest rules and transparency requirements are insufficient to prevent corruption. Faced with a major administrative reform to insulate the provision of public infrastructure from private interests, MPs traded votes to ensure their interests prevailed.

Daron Acemoğlu, Giuseppe De Feo, Giacomo De Luca, 02 March 2018

The Mafia is often cited as one of the main reasons why Sicily has lagged behind the rest of Italy in economic and social development. This column describes how in an environment with weak state presence, the socialist threat of Peasant Fasci organisations at the end of the 19th century induced landholders, estate managers, and local politicians in Sicily to turn to the Mafia to resist and combat peasant demands. Within a few decades, the presence of the Mafia appears to have significantly reduced literacy, increased infant mortality, limited the provision of a variety of local public goods, and may also have significantly reduced local political competition.

Emanuele Colonnelli, 01 February 2018

Chen Lin, Randall Morck, Bernard Yeung, Xiaofeng Zhao, 22 December 2017

Chinese stocks rose sharply overall on news of President’s Xi’s 2012 policy cracking down on corruption, but non-state-owned enterprises in the country’s least liberalised provinces actually lost value. This column argues that China has taught the world something interesting – that prior market liberalisation makes anticorruption reforms more valuable. Once market forces are activated, bribe-hungry officials no longer grease the wheels but instead become pests and invite eradication.

Jonathan Lehne, Jacob Shapiro, Oliver Vanden Eynde, 08 December 2017

Mariassunta Giannetti, Xiaoyun Yu, 30 October 2017

One of Chinese President Xi Jinping’s defining policies has been in the fight against corruption, which hinders innovation and growth by creating privileges for established firms. This column shows that extensive corruption in China may indeed have hampered the process of firm progress, and that the anti-corruption campaign has been a good move towards favouring an efficient allocation of resources and, ultimately, sustained growth.

Jan Hanousek, Anastasiya Shamshur, Jiri Tresl, 29 October 2017

The idea that corruption hinders investments is not new, but the literature has tended to focus on the impact of average corruption levels. Based on 140,000 firm-level observations for 13 Central and Eastern European countries, this column explores the impact of corruption uncertainty. The evidence suggests that while foreign-controlled firms are unaffected by the corruption uncertainty factor, domestic firms decrease investments significantly when uncertainty about corruption practices increases. This decrease in investment is accompanied by a decrease in cash holdings, which points to a possible motive to build off-balance sheet funds for bribery purposes.

Lucie Gadenne, 29 September 2017

Jan Hanousek, Anastasiya Shamshur, Jiri Tresl, 18 September 2017

Bribery and corruption still present a significant cost to many countries today. This column examines how the efficiency of Eastern European private firms is affected by the level of corruption in their operating environment. An environment of high corruption has an adverse effect on firm efficiency, with ‘honest’ firms – typically foreign-owned and/or with female CEOs – penalised even more.

Karthik Muralidharan, Paul Niehaus, Sandip Sukhtankar, 06 July 2017

Michael Callen, Saad Gulzar, Muhammad Yasir Khan, Ali Hasanain, 19 October 2017

Emmanuelle Auriol, Jean-Philippe Platteau, 09 April 2017

The extent to which Islam is responsible for the problems encountered in countries in which it dominates has been the subject of much attention. This column explores the effect of religions with differing organisational structures on progressive institutional reforms, state corruption, and political stability. Decentralised religions such as Islam are more conducive to institutional stagnation and political instability than centralised religions such as Catholicism or Eastern Christianity, with negative consequences for long-term development.

Axel Dreher, Sarah Langlotz, Silvia Marchesi, 02 December 2016

Despite its many benefits, donor governments show little enthusiasm for budget aid, instead preferring to give project aid over which they have greater control. This column argues that budget aid is better than project-specific aid because it attributes full responsibility of expenditure to the recipient government, allowing voters to respond at the ballot boxes to how well the aid is used.

Elisa Gamberoni, Christine Gartner, Claire Giordano, Paloma Lopez-Garcia, 21 October 2016

Economists have argued that corruption in business can potentially grease the wheels of an economy. This column presents evidence from nine Central and Eastern European countries on the effects of bribes on the efficiency with which production factors are allocated across firms. The impact of corruption on capital and labour misallocation is larger the smaller the country, the lower its political stability and the weaker the quality of its regulation. This is evidence against the ‘grease the wheels’ hypothesis.

Philippe Aghion, Ufuk Akcigit, Julia Cagé, William Kerr, 29 August 2016

The relationship between taxation and economic growth is complex, and relies in large part on the efficiency with which taxes are used. This column examines the impact of corruption on this relationship. The boost to welfare from reducing corruption is substantially larger than the marginal gains from optimising the tax rate for an existing level of government efficiency.

Michael Callen, Saad Gulzar, Muhammad Yasir Khan, Ali Hasanain, 21 August 2016

Government employee absenteeism is often a serious problem in developing countries. One potential reason is government positions being appointed as a kind of patronage to reward political loyalty. This column presents the results of an intervention designed to address government doctor absenteeism in Punjab, Pakistan. The programme provided government inspectors with a smartphone app to streamline information flows, and improved inspection rates. The results support the political patronage hypothesis and provide encouraging support for data-driven policymaking.

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