Corruption in Space: A closer look at the world's subnations

Published in European Journal of Political Economy, 2019

In this paper we analyze spatial interdependencies in corruption levels for a large sample of 1232 subnational regions from 81 countries. We find that a subnational region’s corruption level is positively correlated with neighboring subnational regions’ corruption levels. Allowing for heterogeneous spatial effects, we find that most spillovers among subnational regions occur within national borders. Moreover, in particular high income subnational regions and subnational regions with relative low corruption levels tend to spill in space. This is due to their high degree of connectivity in terms of economic, sociocultural and political exchange with other subnational regions. Our estimation results underline the importance to consider not only a subnational region’s own characteristics, but also spatial interdependencies when implementing efficient anti-corruption policies at the local level.