Edited by Adam Graycar and Russell G. Smith
Chapter 4: Assessing Corruption at the Country Level
Francesca Recanatini INTRODUCTION Over the past ten years researchers have increasingly focused on the link between poor governance, corruption and economic growth. The crosscountry evidence has shown how poor governance and corruption can be harmful for the standard of living and the distribution of income of citizens, reducing income per capita and literacy, while increasing infant mortality. Further, poor governance distorts public expenditure and increases poverty, reducing investment efficiency.1 These initial results have posed two challenges for practitioners and policymakers: (i) (ii) to move beyond anecdotal evidence to a systematic approach for measuring governance and corruption and their determinants; and to use data and rigorous analysis to support institutional reforms at the country level to curb corruption and improve governance. Governance and corruption are however multi-dimensional phenomena that can affect different sectors and groups of citizens in a country. Their complexity and multi-sectoral breadth have translated into different methods to define and measure them, leading to a sizeable amount of quite dissimilar information and data. Moreover, the initial research focus on the causes of corruption and poor governance has led to a mushrooming of cross-country indicators. This has posed some difficult tradeoffs for policymakers. Research objectives have often called for comparability and standardization across countries, while effective reform design requires highly disaggregated and country specific data that are comparable over time for monitoring purposes. This chapter proposes an alternative approach to the design and implementation of governance and anti-corruption reforms based on microdata and greater ownership of the diagnostic process....
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