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An empirical analysis using new instrumental variable methods of distributional effects of corruption on public expenditures in developing countries.

ABSTRACT: This study analyses the distributional effects of corruption on public spending in developing countries. It hypothesized that public expenditures with long and complex budgetary procedures are more prone to corruption. However, the new instrumental variables method proposed by Norkute et al. (J Economet 10.1016/j.jeconom.2020.04.008, 2021), was used to correct for the endogenous nature of corruption and the cross-sectional dependence bias of the panel units. The empirical analysis involved data from a sample of 40 countries, observed over the period 2005-2018. The main results show that the bias induced by corruption on the allocation of public expenditure depends as much on the opportunity offered by the expenditure in terms of payment of bribes as on the recipient of this expenditure. Investment spending with complex procedures is favored by corrupt bureaucrats over current spending. Wages and salaries are favored by corruption because they increase the financial benefits of bureaucrats. National and international anti-corruption institutions need to pay particular attention to the channels through which these public expenditure components are processed to establish greater transparency.

Supplementary information

The online version contains supplementary material available at 10.1007/s43546-023-00452-1.

SUBMITTER: Sombie A

PROVIDER: S-EPMC9961305 | biostudies-literature | 2023

REPOSITORIES: biostudies-literature

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An empirical analysis using new instrumental variable methods of distributional effects of corruption on public expenditures in developing countries.

Sombie Ardjouma A

SN business & economics 20230225 3

This study analyses the distributional effects of corruption on public spending in developing countries. It hypothesized that public expenditures with long and complex budgetary procedures are more prone to corruption. However, the new instrumental variables method proposed by Norkute et al. (J Economet 10.1016/j.jeconom.2020.04.008, 2021), was used to correct for the endogenous nature of corruption and the cross-sectional dependence bias of the panel units. The empirical analysis involved data ...[more]

PMID: 36874929

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Project description:ImportanceNumerous study findings suggest that the use of laparoscopy is associated with lower health care costs for many operations, including colectomy. The extent to which these differences are due to the laparoscopic approach itself or selection bias from healthier patients undergoing the less invasive procedure is unclear.ObjectiveTo evaluate the differences in Medicare expenditures for laparoscopic and open colectomy.Design, setting, and participantsA population-based study was conducted of Medicare beneficiaries undergoing laparoscopic or open colectomy between January 1, 2010, and December 31, 2012. The dates of the analysis were November 13 to December 10, 2016. Using instrumental variable methods to account for selection bias, actual Medicare payments after each procedure were evaluated. To identify the mechanisms of potential cost savings, the frequency and amount of physician, readmission, and postacute care payments were evaluated. Several sensitivity analyses were performed restricting the study population by patient demographic or surgeon specialty.Main outcomes and measuresActual Medicare expenditures up to 1 year after the index operation.ResultsThe study population included 428 799 patients (mean [SD] age, 74 [10] years; 57.0% female). When using standard methods, patients undergoing laparoscopic colectomy (vs open) had lower total Medicare expenditures (mean, -$5547; 95% CI, -$5408 to -$5684; P < .01). When using instrumental variable methods, which account for potentially unmeasured patient characteristics, patients undergoing laparoscopic colectomy (vs open) still had lower Medicare expenditures (mean, -$3676; 95% CI, -$2444 to -$4907; P < .01), although the magnitude of the association was reduced. When examining the root causes of the difference in costs between patients who underwent laparoscopic and open colectomy, the key drivers were a reduction in costs from readmissions (mean, -$1102; 95% CI, -$1373 to -$831) and postacute care (mean, -$1446; 95% CI, -$1988 to -$935; P < .01).Conclusions and relevanceThis population-based study demonstrates the influence of selection bias on cost estimates in comparative effectiveness research. While the use of laparoscopy reduced total episode payments, the source of savings is in the postacute care period, not the index hospitalization.

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An empirical analysis using new instrumental variable methods of distributional effects of corruption on public expenditures in developing countries.

Supplementary information

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An empirical analysis using new instrumental variable methods of distributional effects of corruption on public expenditures in developing countries.

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