Measuring Corruption: What Have We Learned


There is current a large concern with corruption around the world as it may be one of the causes for lagging development. There is also a concern that corrupt government will succeed to stay in power using the money obtained in corruption activities to finance political campaigns. Consequently, corruption might jeopardize economic development for a long period of time and questions democracy. To test the consequences and causes of corruption we need to measure the phenomenon. Traditional measures rely on perception surveys despite the shortcomings of these measures. Field and natural experiments or even survey experiments are other alternatives to measure the phenomenon.  In this paper we review the measures available in the literature and propose an index based on objective information from random audit reports. We show that this index is a tool to analyze municipalities in Brazil and that our index is consistent with expected (stylized) behavior, it is relatively easy to compute, and it is normalized between 0 and 1.

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