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The effect of openness on corruption

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  • Jimmy Torrez

Abstract

The seminal paper on the subject of corruption and trade is from Kruger (1974). She finds that quantitative trade restrictions shift resources from directly productive activities to rent seeking activities, such as corruption. This paper analyses the relationship between corruption and trade using corruption estimates and trade measures from multiple sources. The majority of empirical evidence supports a negative relationship between corruption and openness; however, this does not hold for all the data sets available. The estimated relationship seems to depend on the choice of the corruption index. Therefore, the data only provide weak support for the contention that trade restrictions increase corruption.

Suggested Citation

  • Jimmy Torrez, 2001. "The effect of openness on corruption," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 11(4), pages 387-403.
    • Handle: RePEc:taf:jitecd:v:11:y:2001:i:4:p:387-403
    DOI: 10.1080/0963819022000014267
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    References listed on IDEAS

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    1. James R. Hines, Jr., 1995. "Forbidden Payment: Foreign Bribery and American Business After 1977," NBER Working Papers 5266, National Bureau of Economic Research, Inc.
    2. Lee, Lung-fei & Maddala, G S & Trost, R P, 1980. "Asymptotic Covariance Matrices of Two-Stage Probit and Two-Stage Tobit Methods for Simultaneous Equations Models with Selectivity," Econometrica, Econometric Society, vol. 48(2), pages 491-503, March.
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    4. Robert E. Baldwin, 1988. "Trade Policy Issues and Empirical Analysis," NBER Books, National Bureau of Economic Research, Inc, number bald88-2.
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