Crime, corruption and the role of institutions

Abstract

Purpose

There have been very few attempts in the economics literature to empirically study the link between criminal and corrupt behaviour due to lack of data sets on simultaneous information on both types of illegitimate activities. The paper aims to discuss these issues.

Design/methodology/approach

The present study uses a large cross-country data set containing individual responses to questions on crime and corruption along with information on the respondents' characteristics. These micro-level data are supplemented by country-level macro and institutional indicators. A methodological contribution of this study is the estimation of an ordered probit model based on outcomes defined as combinations of crime and bribe victimisation.

Findings

The authors find that: a crime victim is more likely to face bribe demands, males are more likely victims of corruption while females are of serious crime, older individuals and those living in the smaller towns are less exposed to crime and corruption, increasing levels of income and education increase the likelihood of crime and bribe victimisation to be reported and a stronger legal system and a happier society reduce both crime and corruption. However, the authors find no evidence of a strong and uniformly negative impact of either crime or corruption on a country's growth rate.

Originality/value

This paper is, to the authors' knowledge, the first in the literature to explore the nexus between crime and corruption, their magnitudes, determinants and their effects on growth rates.

Citation

Chatterjee, I. and Ray, R. (2014), "Crime, corruption and the role of institutions", Indian Growth and Development Review, Vol. 7 No. 1, pp. 73-95. https://doi.org/10.1108/IGDR-11-2011-0040