Economic Analysis of Corruption in Transition Economics

This thesis gives an overview of the existing literature on economic analysis of corruption and the transition process in Central and Eastern Europe (including the republics of former Yugoslavia and Albania) as well as in the Commonwealth of Independent States. Three formal models (benevolent principal, grabbing hand, and self-reinforcing corruption) are presented and a series of hypotheses is deduced. Some of these hypotheses are tested empirically in a sample of 28 countries. Extreme Bounds Analyses are applied to test the robustness of regression results using variables from a variety of datasets, including data from Transparency International, the World Bank’s BEEPS survey, and others.