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The Economic Effect of Corruption in Italy: A Regional Panel Analysis

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  • Lisciandra, Maurizio
  • Millemaci, Emanuele

Abstract

This paper provides a within-country analysis of the impact of corruption on economic growth using a panel of Italian regions from 1968 to 2011 through a robust measure of corruption. This measure is averaged over 5-year periods to reduce short-run fluctuations and to reduce probable delayed effects, which are typical for latent phenomena such as corruption. The results show a significant negative impact of corruption on long-term growth in all specifications, both on average and for each Italian region. As a consequence, a zero-level of corruption is growth maximizing. This effect is non-linear such that the negative impact of corruption on growth becomes less intense as corruption increases.

Suggested Citation

  • Lisciandra, Maurizio & Millemaci, Emanuele, 2015. "The Economic Effect of Corruption in Italy: A Regional Panel Analysis," MPRA Paper 62173, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:62173
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    2. Giuseppe Attanasi & Alessandro Bucciol & Simona Cicognani & Natalia Montinari, 2017. "The Italian North-South Divide in Perceived Dishonesty: A Matter of Trust?," Working Papers of BETA 2017-32, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    3. Alessandro Cascavilla & Rocco Caferra & Andrea Morone, 2023. "The green and the dark side of distance learning: from environmental quality to socioeconomic inequality," Journal of Behavioral Economics for Policy, Society for the Advancement of Behavioral Economics (SABE), vol. 7(2), pages 33-38, December.
    4. Tamara Fioroni & Andrea Mario Lavezzi & Giovanni Trovato, 2023. "Organized Crime, Corruption and Economic Growth," Discussion Papers 2023/298, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
    5. Calcagnini, Giorgio & Marin, Giovanni & Perugini, Francesco, 2021. "Labour flexibility, internal migration and productivity in Italian regions," Structural Change and Economic Dynamics, Elsevier, vol. 57(C), pages 308-320.
    6. Óscar Afonso & Ana Rita Longras, 2022. "Corruption, institutional quality, and offshoring: How do they affect comparative advantage, inter‐country wage inequality, and economic growth?," Metroeconomica, Wiley Blackwell, vol. 73(4), pages 987-1020, November.
    7. Afonso, Oscar & Bandeira, Ana Maria & Lima, Pedro G., 2022. "Growth and welfare effects of corruption penalties," Economic Systems, Elsevier, vol. 46(3).
    8. Lili Pan & Lin Wang & Qianqian Feng, 2022. "Effects of Host-Country Corruption on China’s Outward Foreign Direct Investments: Expert Knowledge Versus Public Awareness," SAGE Open, , vol. 12(4), pages 21582440221, December.
    9. Fabio Monteduro & Ilenia Cecchetti & Ylenia Lai & Veronica Allegrini, 2021. "Does stakeholder engagement affect corruption risk management?," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 25(3), pages 759-785, September.
    10. Emanuele Millemaci & Alessandra Patti, 2022. "Nemo Propheta in Patria: Empirical Evidence from Italy," Working Papers 2022.10, Fondazione Eni Enrico Mattei.
    11. Tony Ward, 2024. "Ritalin, Animal Spirits and the Productivity Puzzle," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 57(2), pages 129-142, June.
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    13. Muhammad Azam, 2022. "Governance and Economic Growth: Evidence from 14 Latin America and Caribbean Countries," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 13(2), pages 1470-1495, June.

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    More about this item

    Keywords

    corruption; economic growth; cross-regional analysis; dynamic panel data;
    All these keywords.

    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • K4 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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