Corruption and Country Size : Evidence Using Firm-Level Survey Data

What sorts of conditions make some countries more prone to corruption than the others? This is an important question for understanding how corruption arises and how to combat it. The present paper attempts to answer this question by exploring the l...

Full description

Bibliographic Details
Main Authors: Amin, Mohammad, Soh, Yew Chong
Format: Working Paper
Language:English
Published: World Bank, Washington, DC 2019
Subjects:
Online Access:http://documents.worldbank.org/curated/en/186421559050813620/Corruption-and-Country-Size-Evidence-Using-Firm-Level-Survey-Data
http://hdl.handle.net/10986/31746
id okr-10986-31746
recordtype oai_dc
spelling okr-10986-317462022-09-20T00:14:38Z Corruption and Country Size : Evidence Using Firm-Level Survey Data Amin, Mohammad Soh, Yew Chong CORRUPTION BRIBES SMALL AND MEDIUM ENTERPRISES COUNTRY SIZE SURVEY DATA What sorts of conditions make some countries more prone to corruption than the others? This is an important question for understanding how corruption arises and how to combat it. The present paper attempts to answer this question by exploring the link between the size of the country and corruption. Economic theory suggests advantages and disadvantages of being a large country. Fixed costs in monitoring and punishing corrupt politicians and bureaucrats implies lower corruption in larger countries. However, congestion or administrative costs may escalate with country size. Further, greater diversity in the larger countries implies that such countries may find it harder to reach a consensus on growth-enhancing anti-corruption reforms. Thus, the corruption and country size relationship is an empirical issue. Using firm-level survey data for 135 countries, this paper finds that the level corruption experienced by the firms is positively correlated with country size. This holds for a measure of overall corruption and petty corruption that arises in availing specific government services. According to a conservative estimate, moving from a country the size of Namibia (25th percentile level in size) to a country the size of Morocco (75th percentile level) is associated with an increase in the level of overall corruption by 0.28 percentage point or about 23 percent of its mean value. The results are robust to several controls, alternative corruption measures, sample alternations, and different country size measures. 2019-05-30T19:52:19Z 2019-05-30T19:52:19Z 2019-05 Working Paper http://documents.worldbank.org/curated/en/186421559050813620/Corruption-and-Country-Size-Evidence-Using-Firm-Level-Survey-Data http://hdl.handle.net/10986/31746 English Policy Research Working Paper;No. 8864 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper
repository_type Digital Repository
institution_category Foreign Institution
institution Digital Repositories
building World Bank Open Knowledge Repository
collection World Bank
language English
topic CORRUPTION
BRIBES
SMALL AND MEDIUM ENTERPRISES
COUNTRY SIZE
SURVEY DATA
spellingShingle CORRUPTION
BRIBES
SMALL AND MEDIUM ENTERPRISES
COUNTRY SIZE
SURVEY DATA
Amin, Mohammad
Soh, Yew Chong
Corruption and Country Size : Evidence Using Firm-Level Survey Data
relation Policy Research Working Paper;No. 8864
description What sorts of conditions make some countries more prone to corruption than the others? This is an important question for understanding how corruption arises and how to combat it. The present paper attempts to answer this question by exploring the link between the size of the country and corruption. Economic theory suggests advantages and disadvantages of being a large country. Fixed costs in monitoring and punishing corrupt politicians and bureaucrats implies lower corruption in larger countries. However, congestion or administrative costs may escalate with country size. Further, greater diversity in the larger countries implies that such countries may find it harder to reach a consensus on growth-enhancing anti-corruption reforms. Thus, the corruption and country size relationship is an empirical issue. Using firm-level survey data for 135 countries, this paper finds that the level corruption experienced by the firms is positively correlated with country size. This holds for a measure of overall corruption and petty corruption that arises in availing specific government services. According to a conservative estimate, moving from a country the size of Namibia (25th percentile level in size) to a country the size of Morocco (75th percentile level) is associated with an increase in the level of overall corruption by 0.28 percentage point or about 23 percent of its mean value. The results are robust to several controls, alternative corruption measures, sample alternations, and different country size measures.
format Working Paper
author Amin, Mohammad
Soh, Yew Chong
author_facet Amin, Mohammad
Soh, Yew Chong
author_sort Amin, Mohammad
title Corruption and Country Size : Evidence Using Firm-Level Survey Data
title_short Corruption and Country Size : Evidence Using Firm-Level Survey Data
title_full Corruption and Country Size : Evidence Using Firm-Level Survey Data
title_fullStr Corruption and Country Size : Evidence Using Firm-Level Survey Data
title_full_unstemmed Corruption and Country Size : Evidence Using Firm-Level Survey Data
title_sort corruption and country size : evidence using firm-level survey data
publisher World Bank, Washington, DC
publishDate 2019
url http://documents.worldbank.org/curated/en/186421559050813620/Corruption-and-Country-Size-Evidence-Using-Firm-Level-Survey-Data
http://hdl.handle.net/10986/31746
_version_ 1764474997313634304