This paper analyzes which of various plausible determinants are significantly related to an index of "perceived corruption" compiled from business risk surveys for the mid-1990s. Using 2SLS to reduce problems of endogeneity and a variation of Leamer's "extreme bounds analysis" to test for robustness, it finds three factors robustly significant. Countries that were more economically developed and those which are former British colonies were rated "less corrupt". Those which have a federal structure were "more corrupt". Daniel Treisman Assistant Professor Department of Political Science University of California, Los Angeles 4289 Bunche Hall LA CA 90095-1472 Treisman@polisci.ucla.edu First Draft September 1997 Revised April 1998 ####

Abstract: Using several independent data sets, we investigate the relationship between gender and corruption. We show using micro data that women are less involved in bribery, and are less likely to condone bribe taking. Cross-country data show that corruption is less severe where women hold a larger share of parliamentary seats and senior positions in the government bureaucracy, and comprise a larger share of the labor force.

Drawing on an in-depth governance micro-survey of public officials within a country, we address empirically the question of the relative importance of the various determinants of governance. We investigate the causes of poor governance, and show that commonly made inferences about policy based on simple correlation can be highly misleading, because the high correlation between the various governance (and public sector management) determinants, as well as the endogeneity in these variables. We find that undue emphasis may have been given in previous work to a number of conventional public sector management variables (such as civil servant wages, internal enforcement of rules, autonomy of agency by fiat, etc.), while undermining the priority due to more ‘external ’ (to public sector management) variables, such as external voice, transparency, and politicization. The latter set of ‘voice’-related variables has larger affect on the quality of service and corruption than the more traditional public sector management type of variables. Further work drawing in depth on country-specific surveys in other settings is warranted to ascertain with more confidence whether a shift towards more prominence to transparency and ‘voice’-type of variables is needed, backstopping the results for Bolivia in this paper.

suggestions, as well as Eric Eddy for expert research assistance. Analyst forecast information was provided by I/B/E/S Inc. Corruption and International Valuation: Does Virtue Pay? Using firm-level data from 46 countries, we investigate the relation between corruption – the misuse of public office for private gains – and international corporate values. Our analysis shows that firms from more (less) corrupt countries trade at significantly lower (higher) market multiples. This result is robust to the inclusion of many control variables suggested by valuation theory. On average, an increase in the corruption level from that of Singapore to that of Mexico corresponds to a decrease of 18.1 in the PE ratio, and a decrease of 1.17 in the PB ratio. We conclude that corruption has significant economic consequences for shareholder value. 2

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Corruption is attracting a lot of attention around the world. This paper surveys and discusses issues related to the causes, consequences, and scope of corruption, and possible corrective actions. It emphasizes the costs of corruption in terms of economic growth. It also emphasizes that the fight against corruption may not be cheap and cannot be independent from the reform of the state. If certain reforms are not made, corruption is likely to continue to be a problem regardless of actions directly aimed at curtailing

A small body of evidence and a large body of assertion – both bodies growing – support the vague idea that ‘institutions matter for economic development’. This affirmation is intelligible first for what it negates. Many economists, in their models if not in their advice, bracket out

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* The views expressed here do not necessarily reflect those of the respective institutions. The use of a variety of institutional quality and related indices in this paper, compiled from various external organizations, in no way signifies

Ozhan Uzumcuoglu for comments and discussions. We would also like to acknowledge invaluable help from many colleagues from different departments of the Undersecretariat of Treasury, whose names are too numerous to be mentioned here. The views expressed here are the authors ’ and do not necessarily represent those of The aim of this paper is to discuss the size, composition and institutional features of the fiscal adjustment that needs to be undertaken in Turkey. We first develop new measures of public sector deficits and net domestic public debt by explicitly taking account of an important portion of quasi-fiscal activities undertaken by public sector commercial banks, not accounted for in the conventional measures of the PSBR. We find that operational deficits, which measure fiscal deficits after removing the effects of inflation from interest payments, change in line with the coverage of the public sector and with the way in which public sector debt is consolidated. Second, using the framework developed by Anand and Wijnbergen (1989; see also World Bank 1996 for a recent application), we discuss the necessary aggregate adjustment in operational