The effect of openness on corruption

Abstract

The seminal paper on the subject of corruption and trade is from Kruger (1974). She finds that quantitative trade restrictions shift resources from directly productive activities to rent seeking activities, such as corruption. This paper analyses the relationship between corruption and trade using corruption estimates and trade measures from multiple sources. The majority of empirical evidence supports a negative relationship between corruption and openness; however, this does not hold for all the data sets available. The estimated relationship seems to depend on the choice of the corruption index. Therefore, the data only provide weak support for the contention that trade restrictions increase corruption.