Corruption around the world: Evidence from a structural model

The causes and consequences of corruption have attracted much attention in recent years by both academics and policy makers. Central in the discussion on the impact of corruption are perception -based indices. Recent research has shown that perceived corruption might not be a good indicator of actual corruption in a country. In this paper, we employ a structural equation model-that treats corruption as a latent variable that is directly related to its underlying causes and effects-to derive an index of corruption. The index of corruption is derived for approximately 100 countries over the period 1976-1997. Journal of Comparative Economics 35 (3) (2007) 443-466. ETH Zurich, KOF Swiss Economic Institute, Weinbergstrasse 35, 8092 Zurich, Switzerland; CESifo, Germany; School of Business and Economics, University of Exeter, Streatham Court, Rennes Drive, Exeter EX4 4PU, England, UK. (c) 2007 Association for Comparative Economic Studies. Published by Elsevier Inc. All rights reserved.