Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/69319
Authors: 
Kar, Saibal
Saha, Shrabani
Year of Publication: 
2012
Series/Report no.: 
Discussion Paper Series, Forschungsinstitut zur Zukunft der Arbeit 7106
Abstract: 
A number of recent studies for Latin America show that as the size of the informal economy grows, corruption is less harmful to inequality. We investigate if this relationship is equally compelling for developing countries in Asia where corruption, inequality and shadow economies are considerably large. We use Panel Least Square and Fixed Effects Models for Asia to find that both Corruption Perception Index and ICRG index are sensitive to a number of important macroeconomic variables. We find that in the absence of the shadow economy, corruption increases inequality. However, with larger shadow economies in South Asia, the income inequality tends to fall.
Subjects: 
corruption
inequality
shadow economy
panel data
South Asia
JEL: 
J48
K42
O17
O53
Document Type: 
Working Paper

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