چرا فساد اداری کمتر برای نابرابری درآمد در آمریکای لاتین مضر است؟

Conventional wisdom says corruption is bad for income inequality. But recent research on Latin America finds a trade-off between corruption and inequality and suggests this is due to the large informal sector in the region. Using data on a large sample of countries we find that the informal sector impacts the link between corruption and inequality. In particular, the marginal impact of corruption becomes negative once the informal sector becomes large. This is true in Latin America and more generally. Corruption reducing policies should be accompanied by measures that help displaced informal sector workers.

Conventional wisdom says corruption is bad for income inequality. Numerous empirical studies report a positive relationship between corruption and inequality: more corruption leads to more inequality (e.g., Ades and Di Tella, 1997, Dincer and Gunlap, 2008, Gupta et al., 2002, Gyimah-Brempong and Muñoz de Camacho, 2006 and Li et al., 2000). These studies rationalize the result by suggesting several avenues through which corruption is expected to have an adverse impact on inequality (for details see Andres and Ramlogan-Dobson (2011)). Empirical research also points to a feedback relationship between corruption and inequality, which may help to create a corruption–inequality trap (Apergis et al., 2010, Chong and Gradstein, 2007a and Uslander, 2007). That corruption may be harmful to inequality has also been demonstrated in theoretical work. Blackburn and Forgues-Puccio (2007) model the behavior of bureaucrats appointed to implement income redistribution programs to help the poor. The model predicts that bureaucrats will conspire with the rich in providing the authorities with false information. In the macroeconomic model of Foellmi and Oechslin (2007) corruption redistributes income toward the wealthy. This outcome arises because wealth serves as collateral in the determination of how much can be borrowed on the (imperfectly functioning) credit market. Payment of bribes reduces the necessary collateral so the lower the bribe the smaller is the amount of money that can be borrowed. Entrepreneurship is not an option for the poorest in society since they can only generate low levels of collateral. Conventional wisdom has recently been questioned in empirical research on Latin America. Dobson and Ramlogan-Dobson, 2010 and Andres and Ramlogan-Dobson, 2011 provide evidence of a trade-off between corruption and income inequality. They explain this result with reference to the (relatively large) informal sector in the region. The poorest individuals lack the personal characteristics required to find work in the formal economy, while discrimination and institutional barriers also restrict work opportunities. The informal sector therefore provides jobs and a source of income. Policies aimed at reducing corruption impose labor market (and other) regulations and have an adverse impact on employment and welfare in the informal sector. If this hypothesis is correct anti-corruption measures introduced by governments and advocated by organizations such as the World Bank may exacerbate inequality.1 For this reason alone it is important to understand more about the corruption–inequality–informal sector relationship.2 To the best of our knowledge this is the first paper to examine empirically the link between inequality, corruption, and the informal sector. Our key finding is that the informal sector impacts the trade-off between corruption and inequality. In particular, as the informal sector grows corruption is less harmful to inequality. This result is important for three reasons: (i) it lends credence to the findings for Latin America; (ii) it applies to any country where the informal sector is large; and (iii) it suggests that anti-corruption policies need to be accompanied by initiatives which help displaced workers from the informal sector. The rest of the paper is structured as follows. Section 2 considers the theory to support the hypothesis that the informal sector impacts the relationship between corruption and inequality. Section 3 explores some empirical issues and Section 4 discusses the data and methodology. Section 5 reports the results and Section 6 concludes.

Perceived wisdom says corruption is bad for income inequality. Policy makers should therefore introduce anti-corruption measures as a way of reducing inequality. But recent research on Latin America finds a trade-off between corruption and inequality and explains the finding with regard to the large informal sector in the region. If the informal sector argument is correct anti-corruption policies may be misguided. This paper has examined the informal sector hypothesis using data for a large sample of countries and has established empirically that the informal sector impacts the relationship between corruption and inequality. In particular, when the informal sector is large corruption does less harm to inequality. This is true for Latin America and more generally. The findings are robust to different estimation procedures and different measures of inequality and corruption. This research has important implications for policy. One obvious implication is that where institutions are weak (and the informal sector is large) it may be beneficial to allow corruption to grow. The problem with this is that corruption could become pervasive and later on countries may become stuck in a downward spiral with a growing informal sector and an ineffective institutional framework. Furthermore, the informal sector is by nature unregulated with many workers (adults and children) facing exploitation and dangerous working conditions.19 A more suitable strategy is one that fights corruption with one hand and improves other aspects of governance with the other by building stronger institutions to allow improvements in government efficiency and in the quality of the regulatory framework. In short, policy makers in countries with a large informal sector must exercise caution in any attempt to reduce corruption as narrow reform programs may be counterproductive. Anti-corruption policies, institutional reform, and enforcement of laws which have an impact on the informal sector must be accompanied by measures which are able to absorb workers displaced from the informal sector.