Statistical Analysis of Corruption Data and Using the Internet to Reduce Corruption

Corruption is a serious problem in Asia and elsewhere. Harrison and Vinod's (1992) confidence interval for the marginal excess burden (MEB) of taxation is used to estimates the economic harm arising from corruption. One dollar of corruption is estimated to impose a burden of $1.67, which becomes very large when compounded over time. After a brief review of economic theory, this paper uses data on sixteen socio-economic and political variables. A cross-sectional study reveals the relevance of “red tape” and “efficiency of judiciary.” A subset regression using Mallows’ Cp and Akaike information criteria reveals relevance of schooling and income inequality. International aid and cooperation in exposing and fighting corruption and innovative uses of the Internet for information exchange are claimed to be hopeful new tools to fight corruption in the new century.