Corruption, shadow economy and income inequality: Evidence from Asia

Arbeitspapier

A number of recent studies for Latin America show that as the size of the informal economy grows, corruption is less harmful to inequality. We investigate if this relationship is equally compelling for developing countries in Asia where corruption, inequality and shadow economies are considerably large. We use Panel Least Square and Fixed Effects Models for Asia to find that both Corruption Perception Index and ICRG index are sensitive to a number of important macroeconomic variables. We find that in the absence of the shadow economy, corruption increases inequality. However, with larger shadow economies in South Asia, the income inequality tends to fall.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 7106

Classification and Topics

• Classification: Wirtschaft ; Particular Labor Markets: Public Policy ; Illegal Behavior and the Enforcement of Law ; Formal and Informal Sectors; Shadow Economy; Institutional Arrangements ; Economywide Country Studies: Asia including Middle East
• Subject: corruption ; inequality ; shadow economy ; panel data ; South Asia ; Korruption ; Schattenwirtschaft ; Einkommensverteilung ; Schätzung ; Asien

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Kar, Saibal ; Saha, Shrabani
• Event: Veröffentlichung
• (who): Institute for the Study of Labor (IZA)
• (where): Bonn
• (when): 2012

Further information

• Handle: http://hdl.handle.net/10419/69319
• Last update: 10.03.2025, 11:43 AM CET