Corrupt thy neighbor? New evidence of corruption contagion from bordering nations

Abstract

The continuing presence of corruption worldwide has policymakers looking for broader trans-national efforts to combat corruption. We examine the effects of a nation’s physical proximity (via land borders and the number of bordering nations) as well as prevailing corruption on cross-border corruption spillovers. Using data on 147 countries from 2012-2018, results show that while border corruption positively affects corruption in a nation, a longer land border, and more neighbors have a mitigating effect on corruption. Nesting the analysis in the literature on the determinants of cross-national corruption, these new findings imply that a nation’s geographic location might play a larger role in transmissions of corruption than previously recognized. This finding has relevance for the design of anti-corruption coordination across nations.