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Anatomy of grand corruption: A composite corruption risk index based on objective data

Author

Listed:
  • Mihaly Fazekas

    (University of Cambridge Faculty of Politics, Psychology, Sociology)

  • Istvan Janos Toth

    (Centre for Economic and Regional Studies Hungarian Academy of Sciences)

  • Lawrence Peter King

    (Department of Sociology University of Cambridge)

Abstract

Although both the academic and policy communities have attached great importance to measuring corruption, most of the currently available measures are biased and too broad to test theory or guide policy. This article proposes a new composite indicator of grand corruption based on a wide range of elementary indicators. These indicators are derived from a rich qualitative evidence on public procurement corruption and a statistical analysis of a public procurement data in Hungary. The composite indicator is constructed by linking public procurement process 'red flags' to restrictions of market access. This method utilizes administrative data that is available in practically every developed country and avoids the pitfalls both of perception based indicators and previous 'objective' measures of corruption. It creates an estimation of institutionalised grand corruption that is consistent over time and across countries. The composite indicator is validated using company profitability and political connections data.

Suggested Citation

  • Mihaly Fazekas & Istvan Janos Toth & Lawrence Peter King, 2014. "Anatomy of grand corruption: A composite corruption risk index based on objective data," CERS-IE WORKING PAPERS 1403, Institute of Economics, Centre for Economic and Regional Studies.
    • Handle: RePEc:has:discpr:1403
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    References listed on IDEAS

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    Cited by:

    1. Noémi Piricz, 2018. "Survey Of Ethical Behaviour In Hungarian Metal And Machinery Supply Chains," Business Logistics in Modern Management, Josip Juraj Strossmayer University of Osijek, Faculty of Economics, Croatia, vol. 18, pages 627-639.
    2. Kristyna Chabova, 2017. "Measuring corruption in Europe: public opinion surveys and composite indices," Quality & Quantity: International Journal of Methodology, Springer, vol. 51(4), pages 1877-1900, July.

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    More about this item

    Keywords

    public procurement; grand corruption; corruption technique; composite corruption risk index;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement

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