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Corruption and Social Capital

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Abstract

I examine the causal relation between social capital and corruption. A simple model illustrates potential mechanisms and yields testable implications, which I estimate in a sample of European countries. The estimated effect of social capital on corruption is found to be robust to the inclusion of a number of other variables and supplementing the sample with slightly older data from non-European countries. The evidence of the reverse causal direction is weak. I suggest that it is possible to build social capital through investing in education, interest in society and some level of income redistribution, which in turn reduces corruption.

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  • Christian, Bjørnskov, 2003. "Corruption and Social Capital," Working Papers 03-13, University of Aarhus, Aarhus School of Business, Department of Economics.
    • Handle: RePEc:hhs:aareco:2003_013
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    Cited by:

    1. Christopher J. Boudreaux & Boris N. Nikolaev & Randall G. Holcombe, 2018. "Corruption and destructive entrepreneurship," Small Business Economics, Springer, vol. 51(1), pages 181-202, June.
    2. Spyridon Boikos, 2016. "Corruption, Public Expenditure and Human Capital Accumulation," Review of Economic Analysis, Digital Initiatives at the University of Waterloo Library, vol. 8(1), pages 17-45, June.
    3. Geys, Benny & Heinemann, Friedrich & Kalb, Alexander, 2010. "Voter involvement, fiscal autonomy and public sector efficiency: Evidence from German municipalities," European Journal of Political Economy, Elsevier, vol. 26(2), pages 265-278, June.
    4. Mina Baliamoune‐Lutz, 2009. "Human Well‐Being Effects Of Institutions And Social Capital," Contemporary Economic Policy, Western Economic Association International, vol. 27(1), pages 54-66, January.
    5. Hilde Coffé, 2009. "Social Capital and Community Heterogeneity," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 91(2), pages 155-170, April.
    6. Christian Bjørnskov, 2011. "Combating Corruption: On the Interplay between Institutional Quality and Social Trust," Journal of Law and Economics, University of Chicago Press, vol. 54(1), pages 135-159.
    7. Svendsen, Gert Tinggaard, 2003. "Social Capital, Corruption and Economic Growth: Eastern and Western Europe," Working Papers 03-21, University of Aarhus, Aarhus School of Business, Department of Economics.
    8. Soares, Helena & Sequeira, Tiago Neves & Marques, Pedro Macias & Gomes, Orlando & Ferreira-Lopes, Alexandra, 2018. "Social infrastructure and the preservation of physical capital: Equilibria and transitional dynamics," Applied Mathematics and Computation, Elsevier, vol. 321(C), pages 614-632.
    9. Tian, Yonggang & Ang, James S. & Fu, Panpan & Ma, Chaoqun & Wang, Xiuhua, 2024. "Does social trust mitigate insiders' opportunistic behaviors? Evidence from insider trading," Global Finance Journal, Elsevier, vol. 59(C).
    10. Benjamin A. Olken, 2009. "Do Television and Radio Destroy Social Capital? Evidence from Indonesian Villages," American Economic Journal: Applied Economics, American Economic Association, vol. 1(4), pages 1-33, October.
    11. Anneli Kaasa & Eve Parts, 2007. "Individual-Level Determinants Of Social Capital In Europe: Differences Between Country Groups," University of Tartu - Faculty of Economics and Business Administration Working Paper Series 56, Faculty of Economics and Business Administration, University of Tartu (Estonia).
    12. Liu Qijun & Peng Yaping, 2015. "Determinants of Willingness to Bribe: Micro Evidence from the Educational Sector in China," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 235(2), pages 168-183, April.
    13. Hoi, Chun Keung & Ke, Yun & Wu, Qiang & Zhang, Hao, 2023. "Social capital and dividend policies in US corporations," Journal of Financial Stability, Elsevier, vol. 69(C).
    14. Georgarakos, Dimitris & Fürth, Sven, 2015. "Household repayment behavior: The role of social capital and institutional, political, and religious beliefs," European Journal of Political Economy, Elsevier, vol. 37(C), pages 249-265.

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    More about this item

    Keywords

    Corruption; Illegal behavior; Rent-seeking; Social capital;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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