Corruption and Growth: Evidence from the Italian regions

Fiorino, Nadia; Galli, Emma; Petrarca, Ilaria

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http://hdl.handle.net/2183/23343

Corruption and Growth: Evidence from the Italian regions

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Identifiers

URI: http://hdl.handle.net/2183/23343

Publication date

2012

Authors

Fiorino, Nadia

Galli, Emma

Petrarca, Ilaria

Bibliographic citation

Fiorino, N., Galli, E., & Petrarca, I. (2012). Corruption and Growth: Evidence from the Italian regions. European Journal of Government and Economics, 1(2), 126-144. https://doi.org/10.17979/ejge.2012.1.2.4281

Abstract

[Abstract] This paper investigates the impact of corruption on economic growth in the Italian Regions. We estimate a dynamic growth model for the period 1980-2004 addressing both the potential bias of the measures of corruption and the endogeneity between corruption and economic development. We find strong evidence of a negative correlation between corruption and growth. Moreover, since government intervention has been traditionally used to reduce income differentials between the Northern and the Southern regions, we also analyze the interaction between corruption and government expenditure. Our results indicate that corruption undermines the positive impact that public expenditures have on economic growth