THE CAUSES AND CONSEQUENCES OF thesis then continues by ... human societies ... This study provides new insight into the causes and consequences of corruption ...

Download THE CAUSES AND CONSEQUENCES OF   thesis then continues by ... human societies ... This study provides new insight into the causes and consequences of corruption ...

Post on 06-Mar-2018

220 views

Category:

Documents

8 download

TRANSCRIPT

<ul><li><p>THE CAUSES AND CONSEQUENCES </p><p>OF </p><p>CORRUPTION </p><p>A THESIS PRESENTED IN FULFILMENT OF THE </p><p>REQUIREMENTS FOR THE DEGREE OF </p><p>DOCTOR OF PHILOSOPHY IN ECONOMICS </p><p>March 2011 </p><p>BIN DONG </p><p> School of Economics and Finance </p><p>Faculty of Business </p><p>Queensland University of Technology </p><p>Gardens Point Campus </p><p>Brisbane Australia</p></li><li><p>i</p><p>Acknowledgements </p><p>I would like to express my gratitude to my principal supervisor Professor Benno Torgler, for </p><p>walking me through the journey of PhD study and for being there at every step as a source of </p><p>inspiration, motivation and moral support. Professor Torglers excellent supervision, </p><p>invaluable guidance, suggestions, corrections and empirical skills have helped shape much of </p><p>this thesis. I would also like to extend deepest appreciation to my associate supervisor </p><p>Professor Uwe Dulleck for his invaluable guidance and encouragement throughout this study. </p><p>I extend my thanks to Dr. David Johnston for offering invaluable comments and suggestions </p><p>for empirical analysis. I also extend special thanks to the members of the administrative staff </p><p>of the School of Economics and Finance. </p><p> I am extremely grateful to China Scholarship Council and Queensland University of </p><p>technology for jointly providing me the financial support for my PhD study. </p><p> I am deeply indebted to my wife Jin Kang, who has been the motivational force in my life, </p><p>and thank her for her patience, understanding and invaluable support during the PhD study. I </p><p>am grateful to my mother, brother for their selfless and unreserved support over the years. </p><p> Finally I would like to thank Ms Ying Zhou, Mr Tony Beatton and Mr Markus Schaffner </p><p>for their assistance and support. </p></li><li><p>iii</p><p>Abstract </p><p>This thesis comprehensively studies the causes and consequences of corruption in both cross-</p><p>country and within-country contexts, mainly focusing on China. </p><p> The thesis commences by extensively investigating the causes of corruption. Using the </p><p>standard economic approach, this study finds that in China regions with more anti-corruption </p><p>efforts, higher education attainment, Anglo-American historic influence, higher openness, </p><p>more access to media, higher relative wages of government employees, and a greater </p><p>representation of women in legislature are markedly less corrupt; while the social </p><p>heterogeneity, deregulation and abundance of resources, substantially breed regional </p><p>corruption. Moreover, fiscal decentralization is discovered to depress corruption significantly. </p><p>This study also observes a positive relationship between corruption and the economic </p><p>development in current China that is mainly driven by the transition to a market economy. </p><p>Focusing on the influence of political institutions on corruption, the thesis then provides </p><p>evidence that a high level of political interest helps to reduce corruption within a society, </p><p>while the effect of democracy upon corruption depends on property rights protection and </p><p>income distribution. With the social economic approach, however, the thesis presents both </p><p>cross-country and within-country evidence that the social interaction plays an important role </p><p>in determining corruption. </p><p> The thesis then continues by comprehensively evaluating the consequences of corruption </p><p>in China. The study provides evidence that corruption can simultaneously have both positive </p><p>and negative effects on economic development. And it also observes that corruption </p><p>considerably increases the income inequality in China. Furthermore this study finds that </p><p>corruption in China significantly distorts public expenditures. Local corruption is also </p><p>observed to substantially reduce FDI in Chinese regions. Finally the study documents that </p><p>corruption substantially aggravates pollution probably through a loosening of the </p><p>environmental regulation, and that it also modifies the effects of trade openness and FDI on </p><p>the stringency of environmental policy. </p><p> Overall, this thesis adds to the current literature by a number of novel findings concerning </p><p>both the causes and the consequences of corruption. </p><p>Key Words: corruption, causes, consequences, China, democracy, social interaction, political </p><p>interest, economic development. </p></li><li><p>iv</p><p>Table of Contents </p><p>Acknowledgements.................................................................................................................................i</p><p>StatementofOriginalAuthorship.........................................................................................................ii</p><p>Abstract.................................................................................................................................................iii</p><p>TableofContents..................................................................................................................................iv</p><p>ListofTables.........................................................................................................................................vii</p><p>ListofFigures.........................................................................................................................................ix</p><p>ChapterOne Introduction..................................................................................................................1</p><p>1.1MotivationofThesis.....................................................................................................................1</p><p>1.2ContentofThesis..........................................................................................................................2</p><p>1.2.1CausesofCorruption..............................................................................................................2</p><p>1.2.2ConsequencesofCorruption.................................................................................................7</p><p>1.2.3Methodologyissues...............................................................................................................8</p><p>1.3StructureofThesis.......................................................................................................................10</p><p>ChapterTwo EconomicDeterminantsofCorruption:ChineseEvidence.......................................12</p><p>2.1Introduction................................................................................................................................12</p><p>2.2DeterminantsofCorruption........................................................................................................15</p><p>2.3EmpiricalAnalysis........................................................................................................................18</p><p>2.3.1ProvincelevelAnalysis.........................................................................................................20</p><p>2.3.2CitylevelAnalysis.................................................................................................................35</p><p>2.4Conclusion...................................................................................................................................38</p><p>Appendix...........................................................................................................................................41</p><p>ChapterThree PoliticalInterestandCorruption:CrosscountryEvidence..................................44</p><p>3.1Introduction................................................................................................................................44</p><p>3.2PoliticalInterest..........................................................................................................................45</p><p>3.2.1TheoreticalConsiderations..................................................................................................45</p><p>3.2.2ASimpleModel....................................................................................................................46</p><p>3.3Data.............................................................................................................................................48</p><p>3.3.1DependentVariables............................................................................................................48</p><p>3.3.2MeasuringPoliticalInterest.................................................................................................50</p><p>3.3.3FurtherIndependentVariables............................................................................................51</p><p>3.4EmpiricalEvidence......................................................................................................................56</p><p>3.4.1InternationalEvidence.........................................................................................................57</p></li><li><p>v</p><p>3.4.2WithinCountryEvidence.....................................................................................................70</p><p>3.5Conclusion...................................................................................................................................71</p><p>ChapterFour DemocracyandCorruption:CrosscountryEvidence...............................................73</p><p>4.1Introduction................................................................................................................................73</p><p>4.2TheoreticalModel.......................................................................................................................75</p><p>4.2.1Model...................................................................................................................................76</p><p>4.2.2EconomicEquilibrium..........................................................................................................77</p><p>4.2.3PoliticalEquilibrium.............................................................................................................78</p><p>4.3EmpiricalEvidence......................................................................................................................80</p><p>4.3.1MethodologyandData........................................................................................................81</p><p>4.3.2Results..................................................................................................................................85</p><p>4.4Conclusion...................................................................................................................................92</p><p>Appendix...........................................................................................................................................93</p><p>ChapterFive SocialinteractionandCorruption:CrosscountryEvidence.....................................94</p><p>5.1Introduction.................................................................................................................................94</p><p>5.2TheoreticalFoundation................................................................................................................96</p><p>5.2.1BackgroundoftheModel....................................................................................................98</p><p>5.2.2ASimpleGame...................................................................................................................100</p><p>5.2.3Dynamics............................................................................................................................102</p><p>5.2.4ConditionalCorruptionDiscussionandExtensions........................................................102</p><p>5.3DataandMethodologicalApproach.........................................................................................103</p><p>5.3.1MicroAnalysis....................................................................................................................103</p><p>5.3.2MacroAnalysis...................................................................................................................107</p><p>5.4Results.......................................................................................................................................107</p><p>5.4.1MicroLevelusingtheEVS..................................................................................................107</p><p>5.4.2MicroLevelusingtheWVS................................................................................................117</p><p>5.4.3MacroLevelUsingaLargePanelDataSet.........................................................................121</p><p>5.5Conclusion.................................................................................................................................125</p><p>ChapterSix SocialinteractionandCorruption:WithincountryEvidence.................................127</p><p>6.1Introduction..............................................................................................................................127</p><p>6.2TheoreticalModel.....................................................................................................................129</p><p>6.3EmpiricalWork..........................................................................................................................132</p><p>6.3.1DataandMethodology......................................................................................................132</p><p>6.3.2Results................................................................................................................................136</p></li><li><p>vi</p><p>6.4Conclusion.................................................................................................................................139</p><p>Appendix.........................................................................................................................................141</p><p>ChapterSeven ConsequencesofCorruption:ChineseEvidence................................................142</p><p>7.1Introduction..............................................................................................................................142</p><p>7.2LiteratureReview......................................................................................................................145</p><p>7.3EmpiricalAnalysis......................................................................................................................149</p><p>7.3.1DataandMethodology......................................................................................................149</p><p>7.3.2Corruption,EconomicGrowthandIncomeDistribution...................................................153</p><p>7.3.3CorruptionandForeignDirectInvestment........................................................................160</p><p>7.3.4CorruptionandPublicExpenditures..................................................................................162</p><p>7.3.5CorruptionandtheEnvironment.......................................................................................164</p><p>7.4Conclusion.................................................................................................................................169</p><p>Appendix.........................................................................................................................................171</p><p>ChapterEight Conclusion................................................</p></li></ul>

Recommended

View more >