Click on the heading to read the abstract and click the hyperlink to be taken to the publisher's website.
15. Cruz, Manuel David, Chandan Kumar Jha, Fatih Kırşanlı, and Ashish Kumar Sedai, 2023 "Corruption and FDI in natural resources: The role of economic downturn and crises." Economic Modelling, 119: 106122. Download Working Paper.
Abstract: This study adds to largely non-existent literature on corruption and foreign direct investment (FDI) in natural resources by examining the association between the two using a panel of 20 Latin American and Caribbean countries from 1995 to 2020. We find that higher levels of corruption are associated with lower levels of FDI in natural resources, supporting the “grabbing hand” or “sand-the-wheel” hypothesis. Further, we argue that during economic downturns and crises, corrupt agents are likely to use the prevalence of corruption to disregard laws to attract greater FDI in natural resources to compensate for the adversity brought about by hard times. Consistently, we find that while still detrimental to resource FDI, corruption's diminishing effects on resource FDI are much less pronounced during economic downturns and fiscal crises, with the latter measured by credit events leading to a reduction in the present value of the sovereign debt.
14. Cooray, Arusha, Chandan Kumar Jha, and Bibhudutta Panda, forthcoming. "Corruption and Assortative Matching of Partners in International Trade''. European Journal of Political Economy. Download Working Paper.
Abstract: Although the effects of corruption on bilateral trade are well-documented, its impact on the composition of trading partners remains unexplored. In this paper, we argue that corruption in a country imposes asymmetric costs on its trading partners depending on their characteristics. Consequently, as the level of corruption in a country changes, its trade flows from some of its trading partners change more than others, depending on their characteristics, changing the composition of its trading partners. We focus on two characteristics of trading partners: (1) the level of corruption and (2) membership in the Organization for Economic Cooperation and Development Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (OECD Convention). Using the gravity model, we find evidence of a negative assortative matching in international trade with respect to corruption. We find that corruption in a country is negatively associated with trade flows from high-corrupt countries and is positively associated with trade volume from signatories of the OECD convention. Our results suggest that future studies on this topic should consider controlling for institutional dissimilarities between the trading partners as it has implications for bilateral trade costs.
Abstract: The literature examining the effect of institutions on the spread of conflict remains scarce despite 100 civilians being killed in armed conflicts every day as per United Nations statistics. We employ the two-part model to study the effect of institutions on the spread of conflict in 190 countries from 2000 to 2016. We find that a better rule of law lowers the spread of conflict by increasing the cost of violence for perpetrators. Next, conditional on the conflict being present, countries with weaker corruption control experience a lower spread of conflict. Consistent with the “grease the wheels” hypothesis, this finding suggests that victimized groups use bribery to protect themselves against violence. Finally, press freedom reduces the spread of conflict by promoting government accountability, with the effect being higher in countries with greater internet penetration. Our findings highlight the roles of the government and civil society in preventing the loss of lives due to conflicts.
Abstract: Outbreaks of infectious diseases bring behavior and policy responses into sharp focus since societies face acute constraints and uncertainties. This paper compares two infectious disease outbreaks: the Covid-19 pandemic and the 1665 London plague outbreak described by Daniel Defoe in A Journal of the Year of the Plague published in 1722. We compare three aspects: individual behavior, social behavior and governance and find striking similarities in behavior in spite of these events being separated by 350 years. We contend that the same models of behavior can be used to explain human responses during such outbreaks regardless of when they occur.
11. Jaclyn Yap, Vandana Chaudhry, Chandan Kumar Jha, Subha Mani, and Sophie Mitra, 2020. "Are responses to the pandemic inclusive? A rapid virtual audit of COVID-19 press briefings in LMICs''. World Development, 136: 105122.
Abstract: Responses to the COVID-19 pandemic may leave many people behind through a variety of exclusion processes as basic information about the virus and its spread is shared with the public. We conduct a rapid virtual audit of pandemic related press briefings and press conferences issued by governments and international organizations in order to assess if responses have been inclusive to the hearing-impaired communities in low- and middle-income countries (LMICs). We analyze COVID-19 press conferences and press briefings issued during Feb–May 2020, for over 123 LMICs and for international organizations (e.g. the World Bank, the International Monetary Fund, the World Health Organization (WHO)). Our virtual audit shows that only 65% of countries have a sign language interpreter (SLI) present in COVID-19 press briefings and conferences. This number is smaller in low-income countries (41%) and Sub-Saharan African countries (54%). Surprisingly, none of the international organizations including the WHO has a SLI present during COVID-19 press briefings. We recommend all countries and international organizations to reconsider ways to make press conferences accessible to a wide audience in general, and to the hearing impaired communities in particular by including a SLI during their COVID-19 briefings, a primary step towards upholding the sustainable development pledge of “no one gets left behind.”
Abstract: Homo economicus, the typical economic man, is a rational agent whose goal is to find the optimal solution to any problem. However, this may not be feasible in complex situations like the current global pandemic. We argue that in such environments where Knightian uncertainty plays a big role, the behaviour of countries, sectors of the economy, and individuals may be characterised by procedural rationality. Instead of focusing on the outcome, it is argued that the decision-maker draws upon similar experiences and follows a consistent procedure.
Abstract: This paper investigates whether financial reforms promote entrepreneurship. Using a panel of 41 developed and developing countries from around the world, we find that financial sector reforms are positively associated with early-stage entrepreneurial activity. In a variety of robustness checks, including a falsification test, we fail to find the evidence that this relationship is driven due to the omission of unobserved, country-specific factors. Investigating the relationship between reforms in different dimensions of the financial sector and entrepreneurship, we find reforms in directed credit, credit controls, banking supervision, and international capital flows dimensions to be significantly associated with early-stage entrepreneurial activity.
Abstract: This study explores the relationship between social media and democracy in a cross- section of over 125 countries around the world. We find the evidence of a strong, positive correlation between Facebook penetration (a proxy for social media) and democracy. We further show that the correlation between social media and democracy is stronger for low-income countries than high-income countries. Our lowest point estimates indicate that a one-standard deviation (about 18 percentage point) increase in Facebook penetration is associated with about 8-point (on a scale of 0–100) increase for the world sample and over 11 points improvement for low-income countries.
Abstract: This paper assesses the impact of financial reforms on corruption using a panel of 87 countries for 1984-2005. To account for the dynamic nature and high persistence of corruption, the paper employs the difference and system generalized method of moments (GMM) estimators. It finds that policy reforms targeted towards financial liberalization reduce corruption. This result is robust to the inclusion of a number of control variables and the choice of the GMM estimator. Interestingly, the financial liberalization index is found to be positively correlated with corruption though this relationship is not robust. The findings also indicate that legal origins do not impose a binding constraint on the effectiveness of financial reforms in reducing corruption.
6. Hazarika, Gautam, Chandan Kumar Jha, and Sudipta Sarangi, 2019. "Ancestral Ecological Endowments and Missing Women". Journal of Population Economics, 32(4): 1101-1123. (2020 Kuznets Award for the Best Paper)
Abstract: This paper examines the relationship between ecological endowments in antiquity and contemporary female to male sex ratios in the population. It is found that there are proportionately more missing women in countries whose ancestral ecological endowments were poorer. This relationship is shown to be strong even after ancestral plough use, the timing of the Neolithic Transition, and many other potentially confounding factors are controlled for. Similar results are also obtained using district-level data from India.
5. Jha, Chandan Kumar and Sudipta Sarangi, 2018. "Women and Corruption: What Positions Must They Hold to Make a Difference?" Journal of Economic Behavior & Organization, 151: 219–233. Download Working Paper.
Abstract: This paper examines in what precise role -- as bribe takers, decision makers or as policy makers do women have an impact on corruption. Since much of the corruption literature is plagued either by the lack of instruments or weak instruments, this paper makes a methodological contribution by drawing inferences based on Moreira's (2003) conditional likelihood ratio approach. We provide robust evidence that women's presence in parliament has a causal and negative impact on corruption while other measures of female participation in economic activities are shown to have no effect. Further, this negative relationship between women's presence in government and corruption is also found to hold in a regional analysis of 17 European countries alleviating concerns that the relationship is driven by unobservable country-fixed characteristics. Finally, we show that this relationship does not disappear when women gain similarity in social status.
Abstract: This paper investigates the effects of reforms in different dimensions of the financial sector on corruption in a panel of 82 countries. It finds that several, but not all, of the policies targeted toward liberalizing financial sector reduce corruption. Specifically, entry barriers, directed credit, securities market development, and the extent of banking supervision are significantly negatively associated with corruption. The effects of reforms in different dimensions of the financial sector also depend on the quality of the governance (bad versus good governance) and whether the country is an advanced or a non‐advanced economy. Finally, a stronger democracy and better law and order are found to be associated with lower corruption.
Abstract: In this paper we study the relationship between multi-way means of communication and corruption by exploring the link between social media and corruption. Using a cross-country analysis of over 150 countries, we document a robust and statistically significant negative relationship between Facebook penetration (a proxy for social media) and corruption. A falsification test for the relationship between Facebook penetration and corruption is also reported. We find that the relationship between Facebook penetration and corruption is strongest for the set of countries with low press freedom. Moreover, we find that independent of the level of press freedom, social media and press freedom exhibit complementarity in lowering corruption. Finally, our findings also confirm the negative correlation between internet penetration and corruption.
Abstract: While the role of cultural norms in determining corruption is well-explored in the empirical literature, the relationship between a specific aspect of culture, that is, individualism versus collectivism, and corruption is rather unexplored. This paper investigates the relationship between individualism/collectivism and corruption in a large cross-section of countries. To establish causality, the paper uses an index of historical prevalence of infectious diseases and a measure of genetic distance between the population in a country from that in the United States to instrument the individualism/collectivism variable. We find that more individualistic countries have lower levels of corruption (perception). This relationship is robust to the inclusion of a rich set of control variables and to the use of alternative measures of corruption.
1. Jha, Chandan Kumar, 2017. "Information Control, Transparency, and Social Media: Implications for Corruption". Political Scandal, Corruption, and Legitimacy in the Age of Social Media. IGI Global. 51–75.
Abstract: Although the research linking social media and corruption is still in infancy, it provides important insights. It has been shown that social media can prove to be an important tool in fighting corruption. At the same time, freedom on the net is under threat in many parts of the world with governments using a variety of methods, including designing vague and flexible security laws as well as employing technological means, to censor the content that can be shared and accessed by net users. This chapter discusses the implications that government control over information can have for the effects of social media on corruption. It suggests that freedom on the net and the anonymity of net users must be protected if the effects of social media on corruption are to be fully realized.