Political decentralization and corruption: Evidence from around the world

By C. S. Fan, Lingnan University, Hong Kong, Chen Lin, D. Treisman, Ucla. 2009

540 citations recorded by the source corpus.

How does political decentralization affect the frequency and costliness of bribe extraction by corrupt officials? Previous empirical studies, using subjective indexes of perceived corruption and mostly fiscal indicators of decentralization, have suggested conflicting conclusions. In search of more precise findings, we combine and explore two new data sources--an original cross-national data set on particular types of decentralization and the results of a firm level survey conducted in 80 countries about firms' concrete experiences with bribery. In countries with a larger number of government or administrative tiers and (given local revenues) a larger number of local public employees, reported bribery was more frequent. When local--or central--governments received a larger share of GDP in revenue, bribery was less frequent. Overall, the results suggest the danger of uncoordinated rent-seeking as government structures become more complex.

Subfields: Economics and Econometrics, Political Science and International Relations, Sociology and Political Science

View Paper: https://www.semanticscholar.org/paper/6ca69eebce5c876279e9dba397c687ee8f7a1bb6

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Citations in the corpus

Regional Inequality and Decentralization: An Empirical Analysis (2012, unknown): “Gianetti (2002) proposes an impact of economic integration on regional disparities so I also control for trade openness using the sum of imports and exports as a share of the GDP.”
Tax me, but spend wisely? Sources of public finance and government accountability (2015, background): “5See also Jin et al. (2005) and Fan et al. (2009).”
Public Governance and Corporate Fraud: Evidence from the Recent Anti-corruption Campaign in China (2018, methodology): “We adopt the local legal index compiled by Fan et al. (2011) to proxy for the local legal environment.”
Firm lobbying and influence in developing countries: a multilevel approach (2012, methodology): “2007), and corruption (Fan et al. 2009).”
The Impact of Fiscal Decentralization: A Survey (2015, unknown): “3 The political dimension of decentralization is usually measured by whether the constitution classifies a country as a federation or as a unitary state and by whether sub-national officials are elected (Treisman 2006; Fan et al., 2009).”
Reducing bureaucratic corruption: Interdisciplinary perspectives on what works (2018, unknown): “…(2002b) find that the smaller the proportion of a state’s expenditures derived from federal transfers, the lower the state’s levels of corruption.17 Fan et al. (2009) move the debate beyond indices measuring levels of perceived corruption and consider the relationship between multiple indicators…”
Law Enforcement, Municipal Budgets and Spillover Effects: Evidence from a Quasi-Experiment in Italy (2017, background): “This is particularly important with respect to public spending as a decentralized setting could worsen problems of corruption and increase the occasions that favor, for example, bribes or rents (Bardhan and Mookherjee, 2006; Fan et al., 2009).”
How Close Is Your Government to Its People? Worldwide Indicators on Localization and Decentralization (2012, background): “An example of potentially misleading choice of units for comparative analysis is in Fan et al 2009, where the authors create a dummy variable, which is equal to 1 when the executive bodies at the lowest tier of government are elected.”