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Inequality, corruption and the informal sector

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  • Dobson, Stephen
  • Ramlogan-Dobson, Carlyn

Abstract

The marginal impact of corruption on income inequality is shown to be a linear function of the size of the informal sector. This implies that anti-corruption policies alone are unlikely to reduce inequality in countries with a large informal sector.

Suggested Citation

  • Dobson, Stephen & Ramlogan-Dobson, Carlyn, 2012. "Inequality, corruption and the informal sector," Economics Letters, Elsevier, vol. 115(1), pages 104-107.
    • Handle: RePEc:eee:ecolet:v:115:y:2012:i:1:p:104-107
    DOI: 10.1016/j.econlet.2011.11.034
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    References listed on IDEAS

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    7. Schneider, Friedrich G., 2007. "Shadow Economies and Corruption All Over the World: New Estimates for 145 Countries," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 1, pages 1-66.
    8. Kwabena Gyimah-Brempong & Samaria de Gyimah-Brempong, 2006. "Corruption, Growth, and Income Distribution: Are there Regional Differences?," Economics of Governance, Springer, vol. 7(3), pages 245-269, August.
    9. Ulyssea, Gabriel, 2010. "Regulation of entry, labor market institutions and the informal sector," Journal of Development Economics, Elsevier, vol. 91(1), pages 87-99, January.
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    11. Sanjeev Gupta & Hamid Davoodi & Rosa Alonso-Terme, 2002. "Does corruption affect income inequality and poverty?," Economics of Governance, Springer, vol. 3(1), pages 23-45, March.
    12. Jay Pil Choi & Marcel Thum, 2005. "Corruption And The Shadow Economy," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 46(3), pages 817-836, August.
    13. World Bank, 2010. "World Development Indicators 2010," World Bank Publications - Books, The World Bank Group, number 4373.
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    Cited by:

    1. Cuesta, Lizeth & Ruiz, Yomara, 2021. "Efecto de la globalización sobre la desigualdad. Un estudio global para 104 países usando regresiones cuantílicas [Effect of globalization on inequality. A global study for 104 countries using quan," MPRA Paper 111022, University Library of Munich, Germany.
    2. Saha, Shrabani & Beladi, Hamid & Kar, Saibal, 2021. "Corruption control, shadow economy and income inequality: Evidence from Asia," Economic Systems, Elsevier, vol. 45(2).
    3. Sugata Marjit & Suryaprakash Mishra, 2021. "Optimum Size of the Informal Credit Market - A Political Economy Perspective," CESifo Working Paper Series 9252, CESifo.
    4. Adriana AnaMaria Davidescu & Tamara Maria Nae & Margareta-Stela Florescu, 2022. "Exploring the Moderation and Mediation Effects in Addressing the Main Determinants of Income Inequalities in Supporting Quality of Life: Insights from CEE Countries," IJERPH, MDPI, vol. 19(14), pages 1-28, July.
    5. Jude Kenechi Onyima & Nkechi Cordelia Ojiagu, 2017. "Digital Technology and Formalization of informal Businesses: A case of African Traditional Spiritualists," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 7(11), pages 599-609, November.
    6. Ajit Mishra, 2022. "What Sustains Informality? A Study of the Interactions between Formal and Informal Sector Firms," Journal of Development Studies, Taylor & Francis Journals, vol. 58(7), pages 1403-1415, July.
    7. Rajeev K. Goel & James W. Saunoris, 2016. "Casting a Long Shadow? Cross-border Spillovers of Shadow Economy across American States," Public Finance Review, , vol. 44(5), pages 610-634, September.
    8. Andreas Buehn & Mohammad Reza Farzanegan, 2013. "Impact of education on the shadow economy: Institutions matter," Economics Bulletin, AccessEcon, vol. 33(3), pages 2052-2063.
    9. Garcia-Murillo, Martha & Velez-Ospina, Jorge Andres, 2014. "The impact of ICTs on the informal economy," 20th ITS Biennial Conference, Rio de Janeiro 2014: The Net and the Internet - Emerging Markets and Policies 106841, International Telecommunications Society (ITS).
    10. Tamara Maria Nae & Margareta-Stela Florescu & Gabriela-Ioana Bălășoiu, 2024. "Towards Social Justice: Investigating the Role of Labor, Globalization, and Governance in Reducing Socio-Economic Inequality within Post-Communist Countries," Sustainability, MDPI, vol. 16(6), pages 1-16, March.

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    More about this item

    Keywords

    Corruption; Income inequality; Informal sector;
    All these keywords.

    JEL classification:

    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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