Trendline Economics, in cooperation with Université Paris 1 – Pantheon Sorbonne
Presented and defended by: José Victor Cremonesi Giarola
Supervised by: Prof. Lisa Chauvet
Abstract
There is a consensus in the literature on the effects of public institutions in improving the economic, political and social well-being of society. However, for this impact to be effective and efficient, public institutions must inspire confidence among those they serve. Corruption, on the other hand, is seen as one factor that could lead to lack of confidence in public institutions. Therefore, using a large database from African countries (Afrobarometer) and relying on microanalysis, this paper analyzes the presence of corruption among public institutions. We find that, in general, public institutions have failed to inspire confidence among those they serve. Furthermore, to disentangle how different levels of income within a country yield different patterns of response of trust, our analysis also finds that when individuals are exposed to corruption experiences, wealthier individuals tend to lose trust in public institutions even more than those from lower-income levels, by roughly 2%. The results are economically robust and have been run through a set of controls and different specifications. This paper has also introduced a new methodology to deal with endogeneity due to a reverse causality problem between corruption and trust in institutions.
Link to Post