Fernando Arteaga, Desiree Desierto, Mark Koyama, 04 December 2020

When the galleon San José sank in a typhoon in 1694, it was carrying a cargo worth 2% of the GDP of the entire Spanish empire. Fernando Arteaga, Desiree Desierto and Mark Koyama tell Tim Phillips about how bribes sank Spanish treasure ships.

Fernando Arteaga, Desiree Desierto, Mark Koyama, 25 October 2020

The Spanish Crown had a monopoly on the trade route between Manila and Mexico for more than 250 years. The ships that sailed this route were “the richest ships in all the oceans”, but much of the wealth sank at sea and remain undiscovered. This column uses a newly constructed dataset of all of the ships that travelled the route to show how monopoly rents that allowed widespread bribe-taking would have led to overloading and late ship departure, thereby increasing the probability of shipwreck. Not only were late and overloaded ships more likely to experience shipwrecks or to return to port, but the effect is stronger for galleons carrying more valuable, higher-rent cargo. This sheds new light on the costs of rent-seeking in European colonial empires.

Jie Bai, Seema Jayachandran, Edmund Malesky, Benjamin Olken, 22 November 2013

Eliminating corruption is a central policy goal of policymakers around the globe. It is known that corruption is a barrier to economic development because it increases the costs and risk of business activity, and deters investment. This column discusses a new study analysing the opposite causal relationship – the effect of economic growth on corruption. Both theoretical and empirical evidence show that economic growth causes the amount of corruption to fall.

Benjamin Olken , Rohini Pande, 21 January 2012

Recent innovations in methodology have sparked a remarkable expansion in economists’ ability to measure corruption. This column reviews these new techniques, which range from inferring corrupt links from stock prices to attempting to observe bribes undercover. It concludes that, while corruption is prevalent in poor countries, there remains little consensus about its magnitude or the best way to fight it.

Nauro Campos, Eugenio Proto, Saul Estrin, 05 November 2010

Conventional wisdom says that corruption hurts the economy because it taxes investment and weakens public services. This column presents evidence from interviews with CEOs in Brazil. It argues that corruption acts as a barrier to entry, with potential entrants put off by the uncertainty over what bribes to pay and when to pay them.

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