Economic Growth, Law, and Corruption: Evidence from India | Zendy

Sambit Bhattacharyya | Zendy; Raghbendra Jha | Zendy

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Economic Growth, Law, and Corruption: Evidence from India

Author(s) -

Sambit Bhattacharyya,

Raghbendra Jha

Publication year - 2013

Publication title -

comparative economic studies

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 0.306

H-Index - 20

eISSN - 1478-3320

pISSN - 0888-7233

DOI - 10.1057/ces.2013.4

Subject(s) - language change , endogeneity , economics , state ownership , panel data , rule of law , institutional economics , development economics , emerging markets , public economics , monetary economics , macroeconomics , political science , law , politics , art , literature , neoclassical economics , econometrics

Is corruption influenced by economic growth? Are legal institutions such as the ‘Right to Information Act (RTI) 2005’ in India effective in curbing corruption? Using a panel dataset covering 20 Indian states for the years 2005 and 2008 we estimate the effects of growth and law on corruption. Accounting for endogeneity, omitted fixed factors, and other nationwide changes we find that economic growth reduces overall corruption as well as corruption in banking, land administration, education, electricity, and hospitals. Growth reduces bribes but has little impact on corruption perception. In contrast the RTI Act reduces both corruption experience and corruption perception.

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