9 mars 2012 Liam Wren-Lewis : Do infrastructure reforms reduce the effect of corruption? Evidence from Latin America

 Liam Wren-Lewis

ODI Fellow, Ministry of Finance and Development Planning, Malawi and ECARES

Do infrastructure reforms reduce the effect of corruption? Evidence from Latin America

Do infrastructure reforms reduce the effect of corruption? Evidence from Latin America

Liam Wren-Lewis (ODI Fellow, Ministry of Finance and Development Planning, Malawi, ECARES)

Lieu: IAE Paris – Salle B223
Date: Vendredi, 9 Mars, 2012 – 11:0012:30

Abstract: This paper investigates the interaction between corruption and infrastructure policy reforms. I construct a simple model to illustrate how both an increase in regulatory autonomy and privatization may influence the effect of corruption. This interaction is then analysed empirically using a panel of 153 electricity distribution firms across 18 countries in Latin America and the Caribbean between 1995 and 2007. I find evidence that greater corruption is associated with lower firm efficiency, but that this association is reduced when an independent regulatory agency is present. These results survive a range of robustness checks including instrumenting for regulatory governance and corruption. I also find slightly less robust evidence that private ownership further mitigates the association between corruption and efficiency.