Corruption and remittances: Evidence from around the world. This study revisits the sources of corruption using panel data for 146 countries and contributes to the literature by analyzing the relationship between remittances and corruption with a particular focus on the analysis of the distribution of the dependent variable (corruption). | Journal of Economics and Development, , , December 2015, pp. 5-24 ISSN 1859 0020 Corruption and Remittances: Evidence from Around the World Muhammad Tariq Majeed Quaid-i-Azam University, Islamabad, Pakistan Email: tariq@ Abstract This study revisits the sources of corruption using panel data for 146 countries and contributes to the literature by analyzing the relationship between remittances and corruption with a particular focus on the analysis of the distribution of the dependent variable (corruption). In cross sectional and panel settings the author finds that a one standard deviation increase in the remittances variable is associated with an increase in corruption of points, or 25 percent of a standard deviation in the corruption index. The author also investigates whether greater remittances consistently increase corruption among the most and least corrupt countries. Our results show that among the least corrupt countries, remittances do not appear to increase corruption but significantly promote corruption among most corrupt countries. Our findings are robust for different sample specifications, for regional effects and for alternative econometrics techniques. Keywords: Corruption; remittances; panel data; quantile regression. Journal of Economics and Development 5 Vol. 17, , December 2015 1. Introduction inflation and adverse effect on labor market participation (Chami et al., 2003; Barajas et al., 2008). Corruption around the world is believed to be endemic and pervasive, a significant contributor to low economic growth, to stifle investment, to inhibit the provision of public services and to increase inequality to such an extent that international organizations such as the World Bank have identified corruption as ‘the single greatest obstacle to economic and social development’1. Although corruption has become a norm in many countries it is disliked for its detrimental effects on development. The elimination of .
