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Corruption and Growth: Evidence from the Italian Regions

Author

Listed:
  • Nadia Fiorino

    (University of L’Aquila)

  • Emma Galli

    (‘La Sapienza’ University of Rome)

  • Ilaria Petrarca

    (University of Verona)

Abstract

This paper investigates the impact of corruption on economic growth in the Italian Regions. We estimate a dynamic growth model for the period 1980-2004 addressing both the potential bias of the measures of corruption and the endogeneity between corruption and economic development. We find strong evidence of a negative correlation between corruption and growth. Moreover, since government intervention has been traditionally used to reduce income differentials between the Northern and the Southern regions, we also analyze the interaction between corruption and government expenditure. Our results indicate that corruption undermines the positive impact that public expenditures have on economic growth.

Suggested Citation

  • Nadia Fiorino & Emma Galli & Ilaria Petrarca, 2012. "Corruption and Growth: Evidence from the Italian Regions," European Journal of Government and Economics, Europa Grande, vol. 1(2), pages 126-144, December.
    • Handle: RePEc:egr:ejge00:v:1:i:2:p:126-144
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    7. Loudi Njoya & Ibrahim Ngouhouo & Simplice A. Asongu & Friedrich Schneider, 2022. "The role of economic prosperity on informality in Africa: evidence of corruption thresholds from PSTR," Working Papers of the African Governance and Development Institute. 22/012, African Governance and Development Institute..
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    11. Giommoni, Tommaso, 2021. "Exposure to corruption and political participation: Evidence from Italian municipalities," European Journal of Political Economy, Elsevier, vol. 68(C).
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    13. Akbari, Mahsa & Bahrami-Rad, Duman & Kimbrough, Erik O., 2019. "Kinship, fractionalization and corruption," Journal of Economic Behavior & Organization, Elsevier, vol. 166(C), pages 493-528.
    14. Salah Alnahdi, 2020. "The Impact of Corruption on Healthcare Services: Empirical Evidence from the MENA Region," International Journal of Economics and Financial Issues, Econjournals, vol. 10(5), pages 8-15.
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    19. Ilaria Petrarca & Roberto Ricciuti, 2013. "The Historical Roots of Corruption and Economic Development in Italy," CESifo Working Paper Series 4212, CESifo.
    20. Ambar, Rabnawaz, 2015. "Corruption, Inequality and Economic Growth," MPRA Paper 70375, University Library of Munich, Germany, revised 2015.
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    More about this item

    Keywords

    corruption; associative crimes; economic growth; dynamic estimation;
    All these keywords.

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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