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Published in: The European Journal of Health Economics 1/2018

01-01-2018 | Original Paper

Corruption costs lives: evidence from a cross-country study

Authors: Qiang Li, Lian An, Jing Xu, Mina Baliamoune-Lutz

Published in: The European Journal of Health Economics | Issue 1/2018

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Abstract

This paper investigates the effect of corruption on health outcomes by using cross-country panel data covering about 150 countries for the period of 1995 to 2012. We employ ordinary least squares (OLS), fixed-effects and two-stage least squares (2SLS) estimation methods, and find that corruption significantly increases mortality rates, and reduces life expectancy and immunization rates. The results are consistent across different regions, gender, and measures of corruption. The findings suggest that reducing corruption can be an effective method to improve health outcomes.
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Footnotes
2
Growing threat from counterfeit medicines, Bulletin of World Health Organization (2010).
 
3
Frankel and Rose [9] use the same trick. They instrument current income with lagged income in estimating the effect of income and trade on environment.
 
4
TI collected the corruption perception index only for 41 countries in the early years, and there are some missing values of control variables in some years for some countries, the sample size for analysis therefore is 2018.
 
5
The TI CPI ranks countries in terms of the degree to which corruption is perceived to exist among public officials and politicians. It is a composite index, a poll of polls, drawing on corruption-related data from expert and business surveys carried out by a variety of independent and reputable institutions. The CPI reflects views from around the world, including those of experts living in the countries evaluated. The surveys used in compiling the CPI ask questions relating to the misuse of public power for private benefit. Examples include: bribery of public officials, kickbacks in public procurement, embezzlement of public funds and questions that probe the strength and effectiveness of anti-corruption efforts, thereby encompassing both the administrative and political aspects of corruption. For more details and comparison among different corruption indices, please see Rohwer [19].
 
6
Total health expenditure is the sum of public and private health expenditure. It covers the provision of health services (preventive and curative), family planning activities, nutrition activities, and emergency aid designated for health but does not include provision of water and sanitation.
 
7
Ethnic fractionalization index reflects the probability that two randomly selected people from a given country will belong to different such groups. The variable thus ranges from 0 (perfectly homogeneous) to 1 (highly fragmented).
 
8
The linguistic fractionalization index reflects probability that two randomly selected people from a given country will not belong to the same linguistic group. The higher the number, the more fractionalized society.
 
9
The religious fractionalization index reflects probability that two randomly selected people from a given country will not belong to the same religious group. The higher the number, the more fractionalized society.
 
10
Refer to Teorell et al. [22] for detailed methods of compiling original datasets, for example how to merge and split countries.
 
11
The detailed categories in the original data are as follow: (1) Eastern Europe and post-Soviet Union (including Central Asia), (2) Latin America (including Cuba, Haiti & the Dominican Republic), (3) North Africa and the Middle East (including Israel, Turkey & Cyprus), (4) Sub-Saharan Africa, (5) Western Europe and North America (including Australia and New Zealand), (6) East Asia (including Japan and Mongolia), (7) South-East Asia, (8) South Asia, (9) The Pacific (excluding Australia and New Zealand), (10) The Caribbean (including Belize, Guyana and Suriname, but excluding Cuba, Haiti & the Dominican Republic). The paper combines East Asia, South-East Asia and South Asia as Asia, and the Pacific and the Caribbean as the Pacific and the Caribbean due to limited observations in each of these region.
 
12
Other results are available upon request.
 
13
Unless otherwise noted, the index relies on the following sources for information on informal market activities, in order of priority: TI, CPI, 2011; US Department of Commerce, Country Commercial Guide, 2009–2012; Economist Intelligence Unit, Country Commerce, 2009–2012; Office of the US Trade Representative, 2012 National Trade Estimate Report on Foreign Trade Barriers; and official government publications of each country.
 
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Metadata
Title
Corruption costs lives: evidence from a cross-country study
Authors
Qiang Li
Lian An
Jing Xu
Mina Baliamoune-Lutz
Publication date
01-01-2018
Publisher
Springer Berlin Heidelberg
Published in
The European Journal of Health Economics / Issue 1/2018
Print ISSN: 1618-7598
Electronic ISSN: 1618-7601
DOI
https://doi.org/10.1007/s10198-017-0872-z

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