Do Infrastructure Reforms Reduce the Effect of Corruption? Theory and Evidence from Latin America and the Caribbean

This paper investigates the interaction between corruption and governance at the sector level. A simple model illustrates how both an increase in regulatory autonomy and privatization may influence the effect of corruption. The interaction is analy...

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Main Author:	Wren-Lewis, Liam
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, D.C. 2013
Subjects:	ACCOUNTABILITY ANTI-CORRUPTION AUDITING AUDITS AUTONOMY BANK DEPOSITS BENCHMARKING BEST PRACTICES BRIBE BRIBERY BUSINESS CLIMATE CAPACITY BUILDING CITIZENS CIVIL LIBERTIES COMPARATIVE ANALYSIS COMPARATIVE ECONOMICS CONFIDENCE CONSUMERS CORPORATE GOVERNANCE CORRUPT CORRUPT POLITICIANS CORRUPTION CORRUPTION COSTS CORRUPTION LEVELS CORRUPTION PERCEPTIONS COUNTRY DATA CRISES DECISION-MAKING DEMOCRACY DEPOSITS DEREGULATION DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DISCRETION DIVISION OF POWERS ECONOMETRIC ANALYSIS ECONOMIC GROWTH ECONOMIC PERFORMANCE ECONOMICS EDUCATIONAL ATTAINMENT ELASTICITY EMPLOYMENT ENDOGENOUS VARIABLES ENTERPRISE REFORM ENTERPRISE SURVEYS EXPORTS FINANCIAL SECTOR FREEDOM OF THE PRESS FUTURE RESEARCH GDP GDP PER CAPITA GOVERNANCE COMPONENT GOVERNANCE COMPONENTS GOVERNANCE INDICATORS GOVERNMENT DECISION GOVERNMENT OFFICIALS GOVERNMENT REGULATION GOVERNMENT SPENDING GOVERNMENT SUBSIDIES HUMAN RIGHTS INCOME INCREASING RETURNS INCREASING RETURNS TO SCALE INEFFICIENCY INFLATION INSTITUTIONAL FOUNDATIONS INSTITUTIONAL WEAKNESSES INVESTIGATION JUDICIAL INDEPENDENCE LABOR MARKET LABOR PRODUCTIVITY LEGAL ORIGIN LEGAL ORIGINS LEGISLATURE LOCAL GOVERNMENTS MACROECONOMICS MONOPOLIES MOTIVATIONS MUNICIPALITIES NATIONAL LEVEL PERSONAL GAIN POLITICAL ECONOMY POLITICAL ELITES POLITICAL INSTITUTIONS POLITICAL RIGHTS POLITICAL STABILITY POLITICIAN POLITICIANS POOR PERFORMANCE PRESIDENCY PRIVATE OWNERSHIP PRIVATISATION PRIVATIZATION PROPERTY RIGHTS PUBLIC DEBT PUBLIC UTILITIES REAL GDP REGULATORY AGENCY REGULATORY CAPTURE REGULATORY POLICY REGULATORY QUALITY REVERSE CAUSALITY RULE OF LAW RULING PARTY SECTORAL POLICIES SEPARATION OF POWERS SOCIAL WELFARE STATE ENTERPRISE TELECOMMUNICATIONS TOTAL COSTS TRANSPARENCY TRANSPARENT REGULATION TRANSPORT UNEMPLOYMENT URBANIZATION WAGES
Online Access:	http://documents.worldbank.org/curated/en/2013/08/18091392/infrastructure-reforms-reduce-effect-corruption-theory-evidence-latin-america-caribbean http://hdl.handle.net/10986/15925

id	okr-10986-15925
recordtype	oai_dc
spelling	okr-10986-159252021-04-23T14:03:26Z Do Infrastructure Reforms Reduce the Effect of Corruption? Theory and Evidence from Latin America and the Caribbean Wren-Lewis, Liam ACCOUNTABILITY ANTI-CORRUPTION AUDITING AUDITS AUTONOMY BANK DEPOSITS BENCHMARKING BEST PRACTICES BRIBE BRIBERY BUSINESS CLIMATE CAPACITY BUILDING CITIZENS CIVIL LIBERTIES COMPARATIVE ANALYSIS COMPARATIVE ECONOMICS CONFIDENCE CONSUMERS CORPORATE GOVERNANCE CORRUPT CORRUPT POLITICIANS CORRUPTION CORRUPTION COSTS CORRUPTION LEVELS CORRUPTION PERCEPTIONS COUNTRY DATA CRISES DECISION-MAKING DEMOCRACY DEPOSITS DEREGULATION DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DISCRETION DIVISION OF POWERS ECONOMETRIC ANALYSIS ECONOMIC GROWTH ECONOMIC PERFORMANCE ECONOMICS EDUCATIONAL ATTAINMENT ELASTICITY EMPLOYMENT ENDOGENOUS VARIABLES ENTERPRISE REFORM ENTERPRISE SURVEYS EXPORTS FINANCIAL SECTOR FREEDOM OF THE PRESS FUTURE RESEARCH GDP GDP PER CAPITA GOVERNANCE COMPONENT GOVERNANCE COMPONENTS GOVERNANCE INDICATORS GOVERNMENT DECISION GOVERNMENT OFFICIALS GOVERNMENT REGULATION GOVERNMENT SPENDING GOVERNMENT SUBSIDIES HUMAN RIGHTS INCOME INCREASING RETURNS INCREASING RETURNS TO SCALE INEFFICIENCY INFLATION INSTITUTIONAL FOUNDATIONS INSTITUTIONAL WEAKNESSES INVESTIGATION JUDICIAL INDEPENDENCE LABOR MARKET LABOR PRODUCTIVITY LEGAL ORIGIN LEGAL ORIGINS LEGISLATURE LOCAL GOVERNMENTS MACROECONOMICS MONOPOLIES MOTIVATIONS MUNICIPALITIES NATIONAL LEVEL PERSONAL GAIN POLITICAL ECONOMY POLITICAL ELITES POLITICAL INSTITUTIONS POLITICAL RIGHTS POLITICAL STABILITY POLITICIAN POLITICIANS POOR PERFORMANCE PRESIDENCY PRIVATE OWNERSHIP PRIVATISATION PRIVATIZATION PROPERTY RIGHTS PUBLIC DEBT PUBLIC UTILITIES REAL GDP REGULATORY AGENCY REGULATORY CAPTURE REGULATORY POLICY REGULATORY QUALITY REVERSE CAUSALITY RULE OF LAW RULING PARTY SECTORAL POLICIES SEPARATION OF POWERS SOCIAL WELFARE STATE ENTERPRISE TELECOMMUNICATIONS TOTAL COSTS TRANSPARENCY TRANSPARENT REGULATION TRANSPORT UNEMPLOYMENT URBANIZATION WAGES This paper investigates the interaction between corruption and governance at the sector level. A simple model illustrates how both an increase in regulatory autonomy and privatization may influence the effect of corruption. The interaction is analyzed empirically using a fixed-effects estimator on a panel of 153 electricity distribution firms across 18 countries in Latin America and the Caribbean from 1995--2007. Greater corruption is associated with lower firm labor productivity, but this association is reduced when an independent regulatory agency is present. These results survive a range of robustness checks, including instrumenting for regulatory governance, controlling for a large range of observables, and using several different corruption measures. The association between corruption and productivity also appears weaker for privately owned firms compared to publicly owned firms, though this result is somewhat less robust. 2013-09-27T20:52:06Z 2013-09-27T20:52:06Z 2013-08 http://documents.worldbank.org/curated/en/2013/08/18091392/infrastructure-reforms-reduce-effect-corruption-theory-evidence-latin-america-caribbean http://hdl.handle.net/10986/15925 English en_US Policy Research Working Paper;No.6559 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, D.C. Publications & Research :: Policy Research Working Paper Publications & Research Latin America & Caribbean
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	ACCOUNTABILITY ANTI-CORRUPTION AUDITING AUDITS AUTONOMY BANK DEPOSITS BENCHMARKING BEST PRACTICES BRIBE BRIBERY BUSINESS CLIMATE CAPACITY BUILDING CITIZENS CIVIL LIBERTIES COMPARATIVE ANALYSIS COMPARATIVE ECONOMICS CONFIDENCE CONSUMERS CORPORATE GOVERNANCE CORRUPT CORRUPT POLITICIANS CORRUPTION CORRUPTION COSTS CORRUPTION LEVELS CORRUPTION PERCEPTIONS COUNTRY DATA CRISES DECISION-MAKING DEMOCRACY DEPOSITS DEREGULATION DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DISCRETION DIVISION OF POWERS ECONOMETRIC ANALYSIS ECONOMIC GROWTH ECONOMIC PERFORMANCE ECONOMICS EDUCATIONAL ATTAINMENT ELASTICITY EMPLOYMENT ENDOGENOUS VARIABLES ENTERPRISE REFORM ENTERPRISE SURVEYS EXPORTS FINANCIAL SECTOR FREEDOM OF THE PRESS FUTURE RESEARCH GDP GDP PER CAPITA GOVERNANCE COMPONENT GOVERNANCE COMPONENTS GOVERNANCE INDICATORS GOVERNMENT DECISION GOVERNMENT OFFICIALS GOVERNMENT REGULATION GOVERNMENT SPENDING GOVERNMENT SUBSIDIES HUMAN RIGHTS INCOME INCREASING RETURNS INCREASING RETURNS TO SCALE INEFFICIENCY INFLATION INSTITUTIONAL FOUNDATIONS INSTITUTIONAL WEAKNESSES INVESTIGATION JUDICIAL INDEPENDENCE LABOR MARKET LABOR PRODUCTIVITY LEGAL ORIGIN LEGAL ORIGINS LEGISLATURE LOCAL GOVERNMENTS MACROECONOMICS MONOPOLIES MOTIVATIONS MUNICIPALITIES NATIONAL LEVEL PERSONAL GAIN POLITICAL ECONOMY POLITICAL ELITES POLITICAL INSTITUTIONS POLITICAL RIGHTS POLITICAL STABILITY POLITICIAN POLITICIANS POOR PERFORMANCE PRESIDENCY PRIVATE OWNERSHIP PRIVATISATION PRIVATIZATION PROPERTY RIGHTS PUBLIC DEBT PUBLIC UTILITIES REAL GDP REGULATORY AGENCY REGULATORY CAPTURE REGULATORY POLICY REGULATORY QUALITY REVERSE CAUSALITY RULE OF LAW RULING PARTY SECTORAL POLICIES SEPARATION OF POWERS SOCIAL WELFARE STATE ENTERPRISE TELECOMMUNICATIONS TOTAL COSTS TRANSPARENCY TRANSPARENT REGULATION TRANSPORT UNEMPLOYMENT URBANIZATION WAGES
spellingShingle	ACCOUNTABILITY ANTI-CORRUPTION AUDITING AUDITS AUTONOMY BANK DEPOSITS BENCHMARKING BEST PRACTICES BRIBE BRIBERY BUSINESS CLIMATE CAPACITY BUILDING CITIZENS CIVIL LIBERTIES COMPARATIVE ANALYSIS COMPARATIVE ECONOMICS CONFIDENCE CONSUMERS CORPORATE GOVERNANCE CORRUPT CORRUPT POLITICIANS CORRUPTION CORRUPTION COSTS CORRUPTION LEVELS CORRUPTION PERCEPTIONS COUNTRY DATA CRISES DECISION-MAKING DEMOCRACY DEPOSITS DEREGULATION DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DISCRETION DIVISION OF POWERS ECONOMETRIC ANALYSIS ECONOMIC GROWTH ECONOMIC PERFORMANCE ECONOMICS EDUCATIONAL ATTAINMENT ELASTICITY EMPLOYMENT ENDOGENOUS VARIABLES ENTERPRISE REFORM ENTERPRISE SURVEYS EXPORTS FINANCIAL SECTOR FREEDOM OF THE PRESS FUTURE RESEARCH GDP GDP PER CAPITA GOVERNANCE COMPONENT GOVERNANCE COMPONENTS GOVERNANCE INDICATORS GOVERNMENT DECISION GOVERNMENT OFFICIALS GOVERNMENT REGULATION GOVERNMENT SPENDING GOVERNMENT SUBSIDIES HUMAN RIGHTS INCOME INCREASING RETURNS INCREASING RETURNS TO SCALE INEFFICIENCY INFLATION INSTITUTIONAL FOUNDATIONS INSTITUTIONAL WEAKNESSES INVESTIGATION JUDICIAL INDEPENDENCE LABOR MARKET LABOR PRODUCTIVITY LEGAL ORIGIN LEGAL ORIGINS LEGISLATURE LOCAL GOVERNMENTS MACROECONOMICS MONOPOLIES MOTIVATIONS MUNICIPALITIES NATIONAL LEVEL PERSONAL GAIN POLITICAL ECONOMY POLITICAL ELITES POLITICAL INSTITUTIONS POLITICAL RIGHTS POLITICAL STABILITY POLITICIAN POLITICIANS POOR PERFORMANCE PRESIDENCY PRIVATE OWNERSHIP PRIVATISATION PRIVATIZATION PROPERTY RIGHTS PUBLIC DEBT PUBLIC UTILITIES REAL GDP REGULATORY AGENCY REGULATORY CAPTURE REGULATORY POLICY REGULATORY QUALITY REVERSE CAUSALITY RULE OF LAW RULING PARTY SECTORAL POLICIES SEPARATION OF POWERS SOCIAL WELFARE STATE ENTERPRISE TELECOMMUNICATIONS TOTAL COSTS TRANSPARENCY TRANSPARENT REGULATION TRANSPORT UNEMPLOYMENT URBANIZATION WAGES Wren-Lewis, Liam Do Infrastructure Reforms Reduce the Effect of Corruption? Theory and Evidence from Latin America and the Caribbean
geographic_facet	Latin America & Caribbean
relation	Policy Research Working Paper;No.6559
description	This paper investigates the interaction between corruption and governance at the sector level. A simple model illustrates how both an increase in regulatory autonomy and privatization may influence the effect of corruption. The interaction is analyzed empirically using a fixed-effects estimator on a panel of 153 electricity distribution firms across 18 countries in Latin America and the Caribbean from 1995--2007. Greater corruption is associated with lower firm labor productivity, but this association is reduced when an independent regulatory agency is present. These results survive a range of robustness checks, including instrumenting for regulatory governance, controlling for a large range of observables, and using several different corruption measures. The association between corruption and productivity also appears weaker for privately owned firms compared to publicly owned firms, though this result is somewhat less robust.
format	Publications & Research :: Policy Research Working Paper
author	Wren-Lewis, Liam
author_facet	Wren-Lewis, Liam
author_sort	Wren-Lewis, Liam
title	Do Infrastructure Reforms Reduce the Effect of Corruption? Theory and Evidence from Latin America and the Caribbean
title_short	Do Infrastructure Reforms Reduce the Effect of Corruption? Theory and Evidence from Latin America and the Caribbean
title_full	Do Infrastructure Reforms Reduce the Effect of Corruption? Theory and Evidence from Latin America and the Caribbean
title_fullStr	Do Infrastructure Reforms Reduce the Effect of Corruption? Theory and Evidence from Latin America and the Caribbean
title_full_unstemmed	Do Infrastructure Reforms Reduce the Effect of Corruption? Theory and Evidence from Latin America and the Caribbean
title_sort	do infrastructure reforms reduce the effect of corruption? theory and evidence from latin america and the caribbean
publisher	World Bank, Washington, D.C.
publishDate	2013
url	http://documents.worldbank.org/curated/en/2013/08/18091392/infrastructure-reforms-reduce-effect-corruption-theory-evidence-latin-america-caribbean http://hdl.handle.net/10986/15925
_version_	1764431959081091072

Do Infrastructure Reforms Reduce the Effect of Corruption? Theory and Evidence from Latin America and the Caribbean

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