Danger: Local corruption is contagious!

Abstract

Corruption is a major problem, and not only in developing countries. It impedes economic growth, weakens the rule of law and undermines the legitimacy of institutions. Although it has been studied at national level from different perspectives, there is a recent growing body of research on local corruption. As far as we know, these latter studies focused on corruption and its effects on votes. However, a further question arises as to whether there is a mimetic effect on neighbouring municipalities? We employ data from Spain, and the boom in local corruption in the 2000s, to respond to this question. Specifically we have constructed a panel database (2001-2010) on local characteristics, economic factors and corruption at local level in order to achieve this. Our spatial econometrics methodology supports the hypothesis that corruption is not local-specific, and leads to two opposing outcomes: on the one hand, local corruption is contagious and the probability of being 'infected' increases by 3.1 per cent for each corrupt neighbouring municipality; on the other hand the likelihood of a municipality being taken to court increases by 6.7 per cent for each neighbouring municipality accused. Although the former is alarming, the latter provides hope in the fight against local corruption.

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

“…This suggests that larger subnations have lower corruption levels than smaller subnations. This finding is in line with Seldadyo & de Haan (2006) and Lopez-Valcarcel et al (2017), which find that corruption levels increase with population density. Larger subnations are likely to have lower population densities than smaller subnations, which makes citizens of larger subnations less anonymous.…”

“…Recent empirical literature indicates that a similar spatial process works at subnational level. Dong & Torgler (2012), Bologna (2017) and Lopez-Valcarcel, Jiménez & Perdiguero (2017) find spatial interdependencies in the corruption levels of Brazilian municipalities, Spanish municipalities and Chinese provinces, respectively.…”

Corruption as a Self‐Fulfilling Prophecy: Evidence from a Survey Experiment in Costa Rica

“…In theory, scandals such as these could perturb beliefs in a direction conducive to the spread of corruption along the lines of what we found with our subjects in Costa Rica. Outside of the Americas, Spain, which has experienced an unprecedented wave of corruption scandals over the last decade (Lopez‐Valcarcel, Jiménez, and Perdiguero ), would be another country for which the dynamics identified in this article may apply. The existence of these similar cases notwithstanding, an important task for future research is to sort out the degree to which the results encountered here extend to polities where corruption levels and expectations are relatively more stable than in Costa Rica.…”

“…Using state‐level U.S. data from 1995 to 2004, Goel and Nelson () also find evidence of corruption neighborhood effects. Lopez‐Valcarcel, Jiménez, and Perdiguero () similarly find evidence that corruption is contagious using a data set of local Spanish municipalities from 2001 to 2010. Studies by Becker, Egger, and Seidel () and Goel and Saunoris () utilize cross‐national data to estimate the degree to which corruption in one country affects its neighbors.…”

Transparency and local government corruption: what does lack of transparency hide?

“…The findings are that the impact is limited unless media coverage is broad (Fernández-Vázquez and Rivero 2010; Costas-Pérez et al 2012) and that the impact varies depending on whether the party revealed as being corrupt is on the left or right of the political ideological spectrum (Jiménez and García, 2018). Moreover, local corruption is contagious (González et al, 2017).…”