Abstract
The goal of this paper is to revisit Paolo Mauro's influential paper on corruption and growth focusing on the strength of his results under weak identification. The instrument used in his original paper is found to be "weak" as defined by the literature on weak instruments. Our results suggest that there is a high probability that the parameters of interest are locally almost unidentified. We also investigate other instruments commonly used in the corruption literature and obtain similar results. After identifying an instrument with sufficient strength, we fail to reject a zero effect of corruption on investment and economic growth. (JEL C31, D73)
| Original language | English |
|---|---|
| Pages (from-to) | 264-275 |
| Number of pages | 12 |
| Journal | Economic Inquiry |
| Volume | 49 |
| Issue number | 1 |
| DOIs | |
| Publication status | Published - Jan 2011 |
ASJC Scopus subject areas
- Business, Management and Accounting(all)
- Economics and Econometrics