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“Sand” or “grease” effect? The impact of corruption on the investment volume of public−private partnerships

Jorge Fleta-Asín (Departamento de Dirección y Organización de Empresas, Facultad de Economía y Empresa, University of Zaragoza, Zaragoza, Spain)
Fernando Muñoz (Departamento de Contabilidad y Finanzas, Facultad de Economia y Empresa, Universidad de Zaragoza, Zaragoza, Spain)

International Journal of Emerging Markets

ISSN: 1746-8809

Article publication date: 15 June 2021

Issue publication date: 16 May 2023




Some scholars argue that corruption hinders economies and investment because it generates extra costs, while others suggest that it can act as a stimulus. Their mixed empirical findings have prompted the analysis of whether investors' attitude towards corruption changes depending on its degree of prevalence.


The authors examined 4,518 public–private partnerships (PPPs) located in 46 developing countries for the period 1997–2017. The data were collected from the World Bank PPP database. The authors investigated the relationship between the amount of investment in PPP projects and the level of corruption using regression with multilevel mixed effects.


Corruption and the amount of investment in PPP projects are inversely related at the low and high end of the spectrum of corruption, but the relationship is positive towards the middle. Further analysis revealed that this was spurred by high investment PPP projects in less developed countries.


The findings allow the authors to reconcile the opposing positions in the literature through a “sand–grease–sand the wheels” effect between the volume of investment and corruption, which can be configured as a reverse S-shape consisting of three stages.



Authors acknowledge Aragon Government and the European Regional Development Fund for research projects CREVALOR [S42_20R] and CIBER [S38_20R], Centro Universitario de la Defensa de Zaragoza and University of Zaragoza for the research project UZCUD2020-SOC-05 and Ministerio de Ciencia, Innovación y Universidades for the project grant RTI2018-093483-B-I00 (MCIU/AEI/FEDER).

The authors would also like to acknowledge the comments of the editors IIan Alon and Jorge Carneiro, as well as the six reviewers of the previous versions. Finally, the authors also want to thank the work of World Bank's Public Private Partnership Group because without the work they had done to create the database for this work, it would not have been possible to carry out this article. Of course, any possible error in this article is the sole responsibility of the authors.


Fleta-Asín, J. and Muñoz, F. (2023), "“Sand” or “grease” effect? The impact of corruption on the investment volume of public−private partnerships", International Journal of Emerging Markets, Vol. 18 No. 5, pp. 1168-1186.



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