arbitrage boundaries treasury bills and covered interest parity abstract this paper uses the covered interest parity relationship to define upper and lower arbitrage boundaries on domestic treasury bill t bill rates adapting the methodology for estimating frontier functions empirical tests are specified to determine whether the arbitrage boundaries provide a binding constraint on the behavior of the domestic t bill rate empirical evidence is presented for the covered canadian t bill rate which indicates that at various times the us t bill rate has been a binding lower boundary and the euro us ollar deposit rate has provided a binding upper boundary

interest rate expectations and interest parity abstract this paper examines an hypothesis for explaining divergences from interest parity that is based on interest rate expectations if interest rates are expected to rise significantly within the arbitrage oppurtunity implies riskless profit waiting in ths way has been noted in the historical literature seems to make sense theoritically if portfolio adjusment cost in the capital market outweigh any costs of being out of long term equilibrium and explains a significant portion of us uk interest parity divergences using onshore assets in a recent floating preiod

political determinants of electricity provision in small island developing states abstract this paper approaches provision of affordable and reliable electricity in small island developing states sids as a case of public good provision it aims to contribute to our understanding of how regime type and the quality of implementing institutions within political systems affect the prerequisites for successful electrification in sids more specifically we analyse the independent and interdependent effects of level of democracy and control of corruption on per capita household electricity consumption in sids using data from 34 sids over the period 1996 2009 the results show that although the independent effects of level of democracy and control of corruption are sensitive to model specification these two factors do have an interdependent impact on per capita household electricity consumption democratization has positive effects on provision of electricity to the general population only when there is a certain level of corruption control in place the results imply a that it is important for policy actors to acknowledge the interaction between regime type and the quality of implementing institutions and b when planning electrification projects in sids it is necessary to have information about the social and political context in order to design the most effective projects

does corruption cause encumbered business regulations an iv approach in this research we attempt to understand the effects of corruption on business regulations measured by number of procedures time and costs involved in satisfying governmental requisites using two stage least squares 2sls methods we lessen the problems associated with endogeneity and uncovered the existence of a robust positive statistically significant and quantitatively large direction channel from corruption to encumbered business regulations these results suggest the need to deter corruption in order to improve business regulations the quest to reduce corruption worldwide acquires new relevancy given the findings of djankov et al 2006 that countries with simple and transparent regulations grow faster

bureaucracy infrastructure and economic growth evidence from u s cities during the progressive era recent work in the sociology of economic development has emphasized the establishment of a professional bureaucracy in place of political appointees as an important component of the institutional environment in which private enterprise can flourish i hypothesize that establishment of such a bureaucracy will lengthen the period that public decision makers are willing to wait to realize the benefits of expenditures leading to allocation of a greater proportion of government resources to long gestation period projects such as infrastructure this hypothesis can be tested using data generated by a natural experiment in the early part of this century when a wave of municipal reform transformed the governments of many u s cities controlling for city and time effects adoption of civil service is found to increase the share of total municipal expenditure allocated to road and sewer investment other estimates imply that this increased share raises the growth rate of city manufacturing employment by one half percent per year this abstract was borrowed from another version of this item

global economic integration in developing countries the role of corruption and human capital investment globalization is multifaceted and involves the interaction among businesses services governments and societies beyond national borders as a result the flow of foreign direct investment fdi international trade in goods and services and the economic interdependence of the nations of the world have been increasing at the same time much attention has been paid to the effect of corruption prevalent within many cultures and societies and its impact on the economies especially developing economies this paper examines the relationship between human capital investment the level of national corruption and the global economic integration gei of a nation in developing countries based on the data collected from over 60 countries and building on the fdi and human capital theories it was found that human capital investment and corruption are related to gei it was also found that the level of corruption moderates the relationship between human capital investment and gei of developing economies the findings of the study can help to deepen our understanding of gei and have practical implications for developing countries in terms developing human capital which plays a critical role in today s knowledge based economy

legislative organization and pollution taxation the role of political institutions in shaping public policy has been analyzed in isolation from corruption and legislative organization specifically bicameralism has received minimal attention we analyze pollution taxation when decisions are influenced by several veto players such as legislative chambers our theory predicts that an increase in the number of veto players e g moving from uni to bi cameralism pushes the pollution tax towards the social optimum with the effect being conditional on corruption as such dispersion around the optimal tax is lower under bicameralism empirical tests using data from 86 countries support the theory

why don t poor countries catch up a cross national test of an institutional explanation early neoclassical analyses predicted that poor countries would grow faster than wealthy countries because of technological advances and diminishing returns to capital in the latter the reverse has occurred poor countries are falling back rather than catching up we suggest here that deficient institutions underlie this divergence employing various indicators of institutional quality including the rule of law the pervasiveness of corruption and the risk of expropriation and contract repudiation we show that the ability of poor countries to catch up is determined in large part by the institutional environment in which economic activity in these countries takes place jel o00 o10

environmental depletion governance and conflict t he link between natural resource dependence and internal conflict has been approached from a variety of angles in a large and growing interdisciplinary literature while there is an expanding consensus as to what matters the most for such intra state violence episodes the feasibility discontent dichotomy still appears to characterize a disciplinary divide between economists and political scientists this paper attempts to help bridge the gap by allowing for both intrinsic and extrinsic motivations of potential rebels simple non cooperative bargaining yields a nonlinear impact of regulatory quality on the likelihood of conflict and shows that corruption and resource depletion jointly affect the outcome the empirical analysis that follows looks at the effect of environmental depletion and government corruption on the emergence of civil conflicts using a large panel dataset resource depletion the quality of governance and their interaction are found to be significant determinants of civil conflict incidence results are robust to several steps taken to address potential endogeneity concerns

do land revenue windfalls create a political resource curse evidence from china abstract by analyzing a panel on the political turnovers of 4390 county leaders in china during 1999 2008 we find that the revenue windfalls accrued to these officials from land sales have undermined the effectiveness of the promotion system for government officials instead of rewarding efforts made to boost gdp growth promotion is positively correlated with signaling efforts and with corruption the robust positive relationship between land revenue windfalls and political turnover or specifically promotion suggests that those who are politically connected to their superiors and those beyond the prime age for promotion are the primary beneficiaries the case for corruption is substantiated by the evidence inferred from anti corruption crackdowns which reveals that the additional effect of land revenue on political turnover and size of bureaucracy a proxy for corruption decreases significantly in crackdowns but that land revenue has no effect on city construction expenditure a proxy for signaling

nietzschean development failures government policies and substantial external resources and technical assistanceprovided over the course of decades have neither eliminated broad poverty nor resulted inequitable income distributions in the poorer countries of the world this paper explains thedevelopment failures with reference to nietzschean behavior where the strong act withoutethical restraint and the rule of law does not protect the weak while nietzschean behaviorviolates principles of social justice there are also inefficiencies the nietzschean strong whorule have no incentive to adopt efficiency enhancing policies efficiency in a nietzscheansociety is also greater the higher the leisure preference of the weak and the less the weakare capable of producing labor productivity is low because the weak do not consistentlywork these are the outcomes when the strong behave as roving bandits when the strongbehave as stationary bandits efficiency is enhanced but income distribution can be expectedto remain unequal the nietzschean perspective on development failure is compared withalternative explanations for the sustained plight of the poor in poor countries and the unequaldistributions of income and wealth

the aging population and the size of the welfare state is there a puzzle abstract razin sadka and swagel razin asaf efraim sadka and phillip swagel 2002 the aging population and the size of the welfare state the journal of political economy vol 110 no 4 pp 900 918 unveil a puzzling fact the welfare state appears to be shrinking even as the dependency ratio rises while they formulate an elegant political economy model to explain the coexistence of an aging population and declining transfers the resolution of the puzzle turns out to be much simpler labor tax rates and per capita transfers are negatively correlated with the dependency ratio in advanced economies only because this measure includes children as well as retirees both labor tax rates and per capita transfers in advanced economies are in fact historically positively correlated with the ratio of retirees to the working age population and negatively correlated with the ratio of children to the working age population increasing the number of retirees shifts preferences toward higher taxes and transfers by increasing the fraction of the population that receives transfers in contrast workers with more children prefer to spend more of their lifetime income while raising dependents so they prefer smaller public pension systems these results suggest that fiscal leakage from workers to retirees is not required to explain the broad trends in the transfer policies of advanced economies

is corruption grease grit or a gamble corruption increases variance of productivity across countries the effect of corruption on economic growth has attracted interest in empirical development economics the conventional view of corruption as impediment for growth has been challenged by the grease on the wheels hypothesis we take a new perspective on the issue and suggest corruption as macro risk referred to as a gamble hypothesis using cross country data and two alternative indicators of corruption we find corruption to be a significant driver of heteroscedasticity in total productivity this supports the new gamble hypothesis we also note some misleading interpretations in the previously published frontier applications to avoid these shortcomings we apply a flexible semi nonparametric estimator

corruption fertility and human capital abstract we build an overlapping generations model in which reproductive households face a child quantity child quality trade off and bureaucrats are delegated with the task of delivering public services that support the accumulation of human capital by integrating the theoretical analyses of endogenous growth corruption and fertility choices we show that the negative relation between fertility and economic development may also be affected by differences in the magnitude of bureaucratic corruption

risk transactions charges and the market for foreign exchange services this paper suggests that transactions charges in foreign exchange markets rather than being solely brokerage fees represent exchange rate uncertainty in periods of great fluctuations by including remuneration for the assumption of risk by foreign exchange dealers since most of the cost of exchange rate uncertainty may be largely endogenously included in the foreign exchange markets attempts to examine the efficient market hypothesis in these markets should most appropriately include specific consideration of transactions costs there appears to be empirical support for the premise that transactions charges are positively related to exchange rate risk and as well inclusion of contemporaneous bid ask spreads into the interest parity schedule leaves few unexplained profits from dollar pound covered interest arbitrage during the 1970 s and underscores the notion of classifying periods by degree of turbulence in analyzing covered interest arbitrage

the determinants of the treasury security yield curve investors security demands and two points on the yield curve are jointly determined using a disaggregated structural model of the u s treasury securities market the empirical results indicate that the structural model is capable of accurately explaining treasury yields and that changes in a variety of nonyield variables affect the yield curve among these nonyield variables are treasury security supplies which are found to have significant but somewhat volatile impacts depending on investors wealth flows the within sample predictions from the structural model are also compared to those of a naive model most empirical studies of the term structure of interest rates have relied on single equation models of interest rate determination to identify the underlying determinants of long term bond yields the methodologies used in these studies may be grouped into two broad classifications first researchers have frequently specified yield curve relationships based predominately on the expectations hypothesis associated with hicks 23 and lutz 26 and found that current and past short term interest rates provide accurate within sample forecasts of longterm interest rates see for example meiselman 28 wood 54 and dobson sutch and vanderford 8 within this framework modigliani and sutch 33 34 and modigliani and shiller 32 have additionally examined the potential effects resulting from changes in relative asset supplies due to the market segmentation effects suggested by culbertson 7 and risk premiums as a whole the empirical research using the expectations hypothesis as a starting point indicates that nonyield variables are not significant determinants of longterm bond yields furthermore in tests involving the significance of lagged changes in short term interest rates hamburger and latta 21 and elliott and baier 11 among others have found that only contemporaneous changes in shortterm interest rates significantly influence changes in long term bond yields second other researchers have used unrestricted reduced form equations based on loanable funds or liquidity preference theories of interest rate determination see for example okun 35 scott 48 sargent 46 pierson 39 feldstein and

the size and scope of government comparative politics with rational politicians we try to demonstrate how economists may engage in research on comparative politics relating the size and composition of government spending to the political system a downsian model of electoral competition and forward looking voting indicates that majoritarian as opposed to proportional elections increase competition between parties by focusing it into some key marginal districts this leads to less public goods less rents for politicians more redistribution and larger government a model of legislative bargaining and backward looking voting indicates that presidential as opposed to parliamentary regimes increase competition between both politicians and voters this leads to less public goods less rents for politicians less redistribution and smaller government we confront these predictions with cross country data from around 1990 controlling for economic and social determinants of government spending we nd strong and robust support for the prediction that the size of government is smaller under presidential regimes and weaker support for the prediction that majoritarian elections are associated with less public goods

the impact of corruption on entry strategy evidence from telecommunication projects in emerging economies with globalization and the growth in emerging economies multinational enterprises mnes now frequently confront challenges associated with corrupt governments already a growing body of research has demonstrated that corruption significantly reduces a countrys aggregate inflows of foreign direct investment through its effects on firm performance we move the analysis of corruption from aggregate financial flows toward managerial theory and practice by examining how firms adjust their strategy for entering foreign markets in corrupt environments and how different types of corruption affect firms choices building on institutional theory we predict that mnes will respond to pervasive and arbitrary corruption in a host country by selecting particular types of equity and nonequity modes of entry using data on 220 telecommunications development projects in 64 emerging economies we find that firms adapt to the pressures of corruption via short term contracting and entry into joint ventures we also find that the arbitrariness surrounding corrupt transactions has a significant impact on firms decisions in addition to the overall level of corruption in contrast to extant research we show that mnes use nonequity entry modes or partnering as an adaptive strategy to participate in markets despite the presence of corruption

understanding corruption and firm responses in cross national firm level surveys the issue of corruption is important to politicians citizens and firms since the early 1990s a large number of studies have sought to understand the causes and consequences of corruption employing firm level survey data from various countries while insightful these analyses have largely ignored two important potential problems nonresponse and potential false response by the firms we argue that in politically repressive environments firms use nonresponse and potential false response as self protection mechanisms corruption is likely understated in such countries we test our argument using the world bank enterprise survey data of more than 44 000 firms in 72 countries for the period 2000 2005 we find that firms in countries with less press freedom are more likely to provide nonresponse and false response on the issue of corruption therefore ignoring these systematic biases in firms responses could result in serious underestimation of the severity of corruption in politically repressive countries more important these biases are a rich and underutilized source of information on the political constraints faced by the firms firm managers can better evaluate levels of corruption not only by truthful answers to corruption questions but also by nonresponses and false responses to such questions

corruption and destructive entrepreneurship the negative effects of corruption at the macro level are well documented corruption reduces economic growth lowers investment and erodes trust in government officials creating an institutional environment that pushes entrepreneurs from productive to destructive activities corruption also has effects at the micro level because some industries are better situated to profit from corruption than others corruption not only lowers economic output but also shifts resources toward some industries and away from others using federal convictions in the usa as a measure of corruption regression results show that increased corruption shifts resources toward the construction industry and away from the education industry and professional scientific and technical service industry the evidence also shows that the distance from state capitals and voter turnout moderate the relationship between corruption and firm concentrations

does foreign aid distort incentives and hurt growth theory and evidence from 75 aid recipient countries foreign aid transfers can distort individual incentives and hence hurt growth by encouraging rent seeking as opposed to productive activities we construct a model of a growing small open economy that distinguishes two effects from foreign transfers i a direct positive effect as higher transfers allow the financing of infrastructure ii an indirect negative effect as higher transfers induce rent seeking competition by self interested individuals in this framework the growth impact of aid is examined jointly with the determination of rent seeking behavior we test the main predictions of the model for a cross section of 75 aid recipient countries there is evidence that aid has a direct positive effect on growth which is however significantly mitigated by the adverse indirect effects of associated rent seeking activities this is especially the case in recipient countries with relatively large public sectors

transaction costs and the pricing of assets the existence of transaction costs explains why investors do not fully diversify their portfolios this paper examines the implications of such limited diversification oi equilibrium asset prices in the framework of the capital asset pricing model in the pricing equation obtained here an asset s risk premium depends on a weighted average of its covariance with the market and its own variance the absence of transaction costs in the sharpe lintner capital asset pricing model capm is often claimed to be only a minor idealization which hardly affects the substantive implications of the model this paper aims to demonstrate that this is not the case incorporating transaction costs into the capm leads to a major reformulation of its basic asset pricing equation in contrast with the capm formula

exploring the role of economic incentives and spillover effects in biodiversity conservation policies in sub saharan africa abstract a vast array of empirical work investigates the issue of biodiversity conservation but the focus is often limited on the search for possible causes of biodiversity erosion biodiversity conservation policymaking is still understudied in this study this gap is empirically addressed on a sample of 48 sub saharan countries over the 1990 2009 period taking the ecoregion protection score provided by the center for international earth science information network ciesin as a measure of biodiversity conservation policies it is sought whether economic incentives such as biodiversity targeted international transfers as well as tourism revenues have an impact on biodiversity conservation policies moreover spillover effects are also hypothesized owing to the public good character of biodiversity conservation policies international financial assistance as well as tourism are found to have an effect on biodiversity conservation policymaking our results also evidence complementary spatial spillover effects between biodiversity conservation policies

how does corruption affect public debt an empirical analysis summary this paper investigates the relationship between corruption the shadow economy and public debt it additionally examines whether the shadow economy increases the adverse effects of corruption on public debt the model is empirically tested for 126 countries over 1996 2012 using ordinary least squares ols fixed effects system generalized method of moments gmm and instrumental variable estimation and two measures of corruption the transparency international corruption perceptions index and the kaufmann et al corruption index results confirm that increased corruption and a larger shadow economy lead to an increase in public debt results additionally indicate that the shadow economy magnifies the effect of corruption on public debt suggesting that they act as complements results also suggest that a larger shadow economy reduces tax revenues and thus increases public debt similarly higher government expenditure enhances the effects of corruption on government debt hence reducing corruption should be a primary policy goal of governments given the complementarity detected between corruption and the shadow economy reducing corruption would also lead to a fall in the size of the shadow economy and public debt reducing corruption will also minimize the adverse effects of corruption on government debt through government expenditure

ownership and growth this article suggests how state enterprises can be incorporated into the theoretical and empirical growth literature specifically it shows that if state enterprises are less efficient than private firms invest less employ less skilled labor and are less eager to adopt new technology then a large state enterprise sector tends to be associated with slow economic growth all else remaining the same the empirical evidence for 1978 92 indicates that through a mixture of these channels an increase in the share of state enterprises in employment by one standard deviation could reduce per capita growth by one to two percentage points a year from one country to another

natural disasters growth and institutions a tale of two earthquakes abstract we examine the impact of natural disasters on gdp per capita by applying the synthetic control approach and using a within country perspective our analysis encompasses two large scale earthquakes that occurred in two different italian regions in 1976 and 1980 we show that the short term effects are negligible in both regions though they become negative if we simulate the gdp that would have been observed in absence of financial aid in the long term our findings indicate a positive effect in one case and a negative effect in the other largely reflecting divergent patterns of the tfp consistent with these findings we offer further evidence suggesting that a quake and related financial aid might either increase technical efficiency via a disruptive creation mechanism or reduce it by stimulating corruption distorting the markets and deteriorating social capital finally we show that the bad outcome is more likely to occur in regions with lower pre quake institutional quality as a result our evidence suggests that unanticipated local shocks are likely to change long run growth rates exacerbating territorial disparities

the impact of culture on corruption gross domestic product and human development the evidence of culture s impact on corruption and its consequences is still inconclusive despite several investigations 1 sometimes theory is lacking and causes and consequences seem exchangeable based on psychological research on the distribution and use of power we predicted that a steeper distribution of power induces more corruption and elaborated its negative consequences in a complex causal model 2 for measuring power distribution pervading national culture we augmented hofstede s power distance with three additional indicators into a reversed more reliable and valid culture composite called power balanced freedom pbf 3 instead of the usual regression and instrument approaches which cannot estimate multiple causal chains including causal feedback a non recursive path analysis was employed with data from 85 nations pbf predicted less national corruption 62 with positive effects on gross domestic product gdp 72 and inequality adjusted human development ihdi 66 including life expectancy income and education the often expected reverse effect of gdp on corruption was not significant contrary to influential authors from economics culture variables are the most important predictors of corruption and its consequences nonetheless our extended model supports the main thrust of their ideas and adds more precision our conceptual distinction of the uses of power and our empirical measure pbf reflect kant s ethical imperative freedom and autonomy for everyone widely shared life chances as measured by ihdi reflect utilitarian consequentialist ideas these different ethical approaches are connected in the confirmed causal model in line with rawls first and second principle of justice

corruption tax evasion and social values we provide a theoretical explanation for the vicious circle of political corruption and tax evasion in which countries often fall into we address this issue in the context of a model with two distinct groups of agents citizens and politicians citizens decide the fraction of their income for which they evade taxes politicians decide the fraction of the public budget that they peculate we show that multiple self fulfilling equilibria with different levels of corruption can emerge based on the existence of strategic complementarities indicating that corruption may corrupt furthermore we find that standard deterrence policies cannot eliminate the multiplicity of equilibria instead policies that impose a strong moral cost on tax evaders and corrupt politicians can lead to a unique equilibrium

corruption and the composition of government expenditure abstract this paper asks whether predatory behavior by corrupt politicians distorts the composition of government expenditure corruption is found to reduce government spending on education in a cross section of countries

clean or dirty energy evidence of corruption in the renewable energy sector this paper studies the link between public policy and corruption for the case of wind energy we show that publicly subsidized renewable energy can attract criminal appetites and favor the formation of criminal associations between entrepreneurs and politicians able to influence the licensing process the insights of a simple model of political influence by interest groups are tested empirically using italian data for the years 1990 2007 using a difference in difference approach we quantify the impact of a green certificate policy aimed at supporting renewables and find robust evidence that criminal association activity increased more in windy provinces after the introduction of the generous policy regime the magnitude of the effect is large the construction of an average wind park is associated with an increase in criminal activity of 6 in the treatment compared to the control group our findings show that in the presence of poor institutions even well designed market based policies can have an adverse impact the analysis is relevant for countries that are generally characterized by heavy bureaucracies weak institutions and by large renewable potential

informality and rent seeking bureaucracies in a model of long run growth abstract this paper explores the links among growth the informal economy and rent seeking bureaucracies the presence of congestion associated with the enforcement of property rights implies that informality can be useful whether bureaucratic rent seeking is detrimental to growth then depends on how good a substitute informality is to production in the formal sector in order to create profits which can be appropriated rent seeking bureaucrats limit entry into the formal economy as a result firms operate in the informal sector even when the cost of informality is high in which case lower growth emerges however when the cost of informality is low a large number of firms choose to operate informally irrespective of entry conditions in the latter case growth is unaffected by a rent seeking bureaucracy as entry restrictions in the formal economy do not bind

hold your nose and vote corruption and public decisions in a representative democracy this paper analyzes how corruption alters policy decisions in democracy and examines whether this distortion can result in a long term persistence of corruption even when the voters are well informed and rational by applying a citizen candidate model of representative democracy the paper analyzes how corruption distorts the allocation of resources between public and private consumption altering the policy preferences of elected and nonelected citizens in opposite directions the outcome is a reduction in real public expenditure and if the median voter s demand for public goods is sufficiently elastic a reduction in taxes in this case some citizens benefit indirectly from corruption the paper also presents some empirical evidence that in democratic countries corruption results in lower tax revenue and proceeds to show that when this occurs citizens anticipating a shift in preferences in favor of public expenditure may support institutions that favor corruption this result complements the findings of other studies that have attributed the persistence of corruption in democracy to some failure on the part of the voters or the electoral system it also bears implications for developing effective anticorruption strategies and for redefining the role that can be played by the international community

the effectiveness of laws against bribery abroad this paper analyzes the effectiveness of laws against bribery abroad in inducing foreign investors to reduce their investments in corrupt countries the laws are designed to reduce the supply of bribes by foreign investors by increasing the costs of bribing abroad such increase in costs will make foreign investors more sensitive to corruption and induce them to reduce their investments in corrupt countries however the paper argues that these laws need to be implemented and coordinated in multiple countries to become effective otherwise investors in a country will have incentives to bypass them when competitors from other countries are not bound by similar legal constrains the empirical analysis shows that investors from countries that implemented the oecd convention on combating bribery of foreign public officials in international business transactions of 1997 reduced their investments in corrupt countries investors from the us which were bound by the foreign corrupt practices act of 1977 also reduced investments in corrupt countries but only after the oecd anti bribery convention was in place

the size and composition of government expenditure abstract this paper tests several leading hypotheses on determinants of government expenditure the purpose is to avoid omitted variables bias by testing the prominent theories in a comprehensive specification to identify persistent puzzles for the current set of theories and to explore those puzzles in greater depth by looking at the composition of government expenditure and the level of government at which it takes place as well as its magnitude using government financial statistics data from the imf covering over 100 countries from 1970 2000 i look at cross sectional and inter temporal variation in government expenditure and both individual categories of expenditure such as defense education health care and different levels of government central and local among other results i find a new explanation for wagner s law widespread evidence that preference heterogeneity leads to decentralization rather than outright decreases in expenditures that a great deal of the expenditure associated with increased trade openness is not in categories that explicitly insure for risk and evidence that both political access and income inequality affect the extent of social insurance

measuring corruption in china an expenditure based approach using household survey data most existing micro level empirical analyses of corruption rely on administrative records special purpose surveys or field experiments which can be difficult or very costly to obtain in some situations in this paper we apply an expenditure based method of quantifying the extent of corruption in a particular country using household survey data this method utilizes discrepancies between consumption and reported income to measure corruption another contribution of this paper is that it provides the first objective estimate of the extent of corruption in china we use a quadratic clothing expenditure function to estimate the extent of corruption in china in 2002

a free press is bad news for corruption abstract this paper tests the proposition that a free press may be a powerful control on corruption we find evidence of a significant relationship between more press freedom and less corruption in a large cross section of countries this result is robust to specification and sample and the relationship is not sensitive to the choice of a particular measure of corruption or of press freedom furthermore we present evidence which suggests that the direction of causation runs from higher press freedom to lower corruption

the composition of public expenditure and economic growth abstract noting that the literature has focused on the link between the level of public expenditure and growth we derive conditions under which a change in the composition of expenditure leads to a higher steady state growth rate of the economy the conditions depend not just on the physical productivity of the different components of public expenditure but also on the initial shares using data from 43 developing countries over 20 years we show that an increase in the share of current expenditure has positive and statistically significant growth effects by contrast the relationship between the capital component of public expenditure and per capita growth is negative thus seemingly productive expenditures when used in excess could become unproductive these results imply that developing country governments have been misallocating public expenditures in favor of capital expenditures at the expense of current expenditures