Bureaucratic corruption and income: Evidence from the land sector in Bangladesh

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We examine, for the first time, the effects of corruption on income using household survey data from a developing country. Estimating the effects of corruption on income is challenging because of the simultaneous relationship between the two variables. We use a two-step instrumental variable approach to identify the effects of corruption on income. We find that after adjusting for simultaneity bias the act of bribery reduces income and that higher bribes have a negative effect on income. Taken together, our results provide a possible explanation why a vicious cycle between corruption and income inequality does not exist in the land sector in Bangladesh.
Original languageEnglish
Pages (from-to)1499-1516
Number of pages18
JournalJournal of Development Studies
Issue number10
Publication statusPublished - 2 Oct 2016

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