Corruption, institutions and trade

The economics literature describes various factors that affect trade between countries, which, in addition to the standard economic and geographic factors, also include cultural, ethnic and historical factors. The present study is apparently one of only a few attempts in the literature to examine directly the effects of corruption on trade and the first attempt to examine trade over time in a specific country whose level of corruption changed significantly. Israel was chosen as the subject of the study mainly because of the fact that, according to international indexes, the country’s status as a civil society has declined significantly over the past decade. According to the corruption index of Transparency International, Israel was ranked 33rd in the world, at the end of the sample period in 2008, having fallen from 14th in 1995. The results of the research can serve as the basis for comparison to similar studies of other Western countries. The study’s conclusions support the hypothesis that the effect of corruption on trade of any given country is significant, stable and negative.     

The Nature of Corruption Deterrence in a Competitive Media Sector

This paper compares the deterrence provided by a competitive media sector towards government induced corruption with that of a media monopoly in a setting where the media might raise both true as well as false allegations of corruption. It finds that competition’s impact on corruption deterrence is not necessarily better than a monopoly but rather hinges on a delicate balance between government’s kickback from corruption and the media’s potential benefit from exposure. While the paper does identify conditions in which a competitive media sector would improve upon the deterrence provided by a monopoly, it also find conditions under which it would do no better than a monopoly and in some situations its strategic response could be even worse especially when it intensifies effort towards justifying false allegations.     

Growth, public investment and corruption with failing institutions

Corruption is thought to prevent poor countries from catching up with richer ones. We analyze one channel through which corruption hampers growth: public investment can be distorted in favor of specific types of spending for which rent-seeking is easier and better concealed. To study this distortion, we propose a dynamic model where households vote for the composition of public spending, subject to an incentive constraint reflecting individuals’ choice between productive activity and rent-seeking. In equilibrium, the structure of public investment is determined by the predatory technology and the distribution of political power. Among different regimes, the model shows a possible scenario of distortion without corruption in which there is no effective corruption but the possibility of corruption still distorts the allocation of public investment. We test the implications of the model on a set of countries using a two-stage least squares estimation. We find that developing countries with high predatory technology invest more in housing and physical capital in comparison with health and education. The reverse is true for developed countries.      

Corruption, Growth, and Income Distribution: Are there Regional Differences?

This paper uses panel data from 61 countries at different stages of economic development over a 20-year period to investigate regional differences in the effect of corruption on economic growth and income distribution. Using two measures of corruption, we find that there are statistically significant regional differences in the growth and distributional impacts of corruption. The largest growth impact of corruption is found in African countries while OECD and Asian countries have the lowest growth impact. On the other hand, the largest distributional impact of corruption in found in Latin America. A 10% decrease in corruption increases the growth rate of income by about 1.7% in OECD and Asian countries, 2.6% in Latin American countries, and by 2.8% in African countries. A one standard deviation decrease in corruption decreases the gini coefficient of income distribution (0–1 scale) by 0.05 points, 0.14 points, 0.25 points, and 0.33 points in OECD, Asian, African, and Latin American countries, respectively. The results are robust to various specifications, measurement of corruption, measures of investment, as well as the conditioning variables. The results have interesting policy implications for economic growth, especially in low income countries with high rates of corruption.     

A Multitrait-Multimethod approach to pinpoint the validity of aggregated governance indicators

This study scrutinizes the construct validity of three corruption indices by assessing their discriminant and convergent validity in reference to democracy and the shadow economy with a Multitrait-Multimethod technique. It turns out that prominent indices of corruption (such as the Corruption Perception Index) do not only measure a country’s level of corrupt activities but also the degree of democracy due to their multidimensionality. While the convergent validity of corruption indices is warranted, discriminant validity must be considered as rather low. This implies problems like collinearity if multidimensional constructs are used for multivariate analysis.     

Is corruption bad for economic growth? Evidence from Asia-Pacific countries

This study utilizes the bootstrap panel Granger causality approach, which incorporates both cross-sectional dependence and heterogeneity across countries, to investigate whether corruption negatively impacts economic growth in thirteen Asia-Pacific countries over the 1997–2013 period. The empirical results show that there is a significantly positive causality running from corruption to economic growth in South Korea, a significantly positive causality running from economic growth to corruption in China and no significant causality between corruption and economic growth for the remaining countries. According to the empirical results, we do not support the common perception that corruption is bad for economic growth for all thirteen Asia-Pacific. On the contrary, results of this study suggest that the “grease the wheels” hypothesis is supported for South Korea. Additionally, results of this study indicate that for most Asia-Pacific countries, policy makers’ use of anti-corruption policies to promote a country's economic development may not be effective. Finally, results of this study also suggest that for China, increase in economic growth leads to an increase in corruption.     

Deterrence versus intrinsic motivation: Experimental evidence on the determinants of corruptibility

This paper reports on an experiment of corruption that was conducted in two treatments: one with the possibility of detection and one without. It turns out that monitoring reduces corruption through deterrence; at the same time, it destroys the intrinsic motivation for honesty. Thus the net effect on overall corruption is a priori undetermined. We show that the salary level has an influence on corruption through increased opportunity costs of corruption, but fail to find evidence for a ‘payment satisfaction’ effect. Interesting policy conclusions emerge. RID="*" ID="*" Acknowledgments: We are indebted to Johann Graf Lambsdorff for calling our attention to Fujimori's gender policy and to Ernst Fehr, Bruno Frey, Alireza Jay Naghavi, and two anonymous referees for valuable comments.     

Critical creativity criteria for students in higher education: taking the interrelationship effect among dimensions into account

It is known that the overall competitive advantages enjoyed by the Taiwanese higher education system have been decreasing in recent years relative to the educational systems of other countries. In light of aiming to become a kingdom of innovation, how to regain its competitive advantages over the very short term has become a critical issue requiring immediate attention. Based on previous research indicating that improving innovation is among the primary ways of enhancing an education system’s competitive advantages, that creativity is the foundation of innovation, that organizations that truly understand human creativity and are committed to nurturing it and living with the consequences of doing so are those that are most likely to succeed, and that students are a major group to be regarded as the backbone of a nation’s future development, the aim of this study is to explore critical criteria for creativity, which could significantly improve the creativity of college students. Although related studies can be found today, these studies seem to ignore the different effects of different dimensions of creativity evaluation, leading to results that are irrational and not completely suitable for real practice. In this regard, a perception of interrelationships among these dimensions is thus taken into account while calculating weights of evaluation creativity dimensions and criteria. In accordance with the result, the top six explored critical creativity criteria are shown to help enhance today’s college students’ creativity.     

Trade intensity,country size and corruption

Abstract. Several authors claim to provide evidence that governmental corruption is less severe in countries where trade intensity is higher or populations are smaller. We argue that theory is highly ambiguous on these questions, and demonstrate that empirical links between corruption and trade intensity – or country size, strongly related to trade intensity – are sensitive to sample selection bias. Most available corruption indicators provide ratings only for those countries in which multinational investors have the greatest interest: these tend to include almost all large nations, but among small nations only those that are well-governed. We find that the relationship between corruption and trade intensity disappears, using newer corruption indicators with substantially increased country coverage. Similarly, the relationship between corruption and country size weakens or disappears using samples less subject to selection bias. Received: July 2001 / accepted: April 2002 We thank Anand Swamy and two anonymous referees for helpful comments and suggestions, Paul Schorosch for able research assistance, and Ray Fisman, Roberta Gatti, Aart Kraay, and Shang-jin Wei for kindly providing data. The conclusions of this paper are not intended to represent the views of the World Bank, its Executive Directors, or the countries they represent.     

工具经济边际与生命科学宣言

三大事件表明工具经济发展边际的到来,决定人类经济形态由此走向目的经济即生命科学经济时代。其意义不仅在于工具经济所面临的各种危机可以得到有效克服,而且可以明晰中国经济转型升级的基本方向。实际上,生命科学已经对人类经济文明起到了引领作用,原因就在于人的需求是无限的。更为重要的是,只有到了生命科学经济时代,资源不再仅仅只有加工、生产和耗费的价值,其内在的多重价值都能得到充分的展现,地球生态也由此才能取得可持续发展的效应。而东方文明,由于其系统思维和"抽象具体"的思辨逻辑,以及在生命科学范畴内的研究成果,将引领人类经济文明未来的发展方向。