TITLE:
Grease or Sand the Wheels? A State-Level Approach on Corruption in Brazil
AUTHORS:
Francisco Germano Carvalho Lucio, Ricardo A. de Castro Pereira, José Weligton Félix Gomes
KEYWORDS:
Brazilian States, Corruption, Spatial Analysis
JOURNAL NAME:
Theoretical Economics Letters,
Vol.10 No.3,
June
22,
2020
ABSTRACT: This paper investigates the effects of corruption on
income per capita over Brazilian states. Given the absence of proxies for
corruption in this subnational level, it creates objective proxies for that. To
achieve more accuracy on analyses, this paper also controls for spatial
correlation. Although corruption had presented a negative and significant effect on aspatial models, it is
indeed nonsignificant as long as it controls for spatial dependence. Hence, it
seems corruption has no impact on GDP per capita at the state-level in Brazil.
Therefore, neither the “grease the wheels” nor the “sand the wheels” hypothesis
fits the Brazilian states.