Crime, Corruption and Institutions

This paper explores the link between crime and corruption, compares their magnitudes, determinants and their effects on growth rates. The study uses a large cross country data set containing individual responses to questions on crime and corruption along with information on the respondents’ characteristics. This data set is supplemented by country level indicators from a variety of sources on a range of macro variables and on institutions in the respondent’s country of residence. A methodological contribution of this study is the estimation of an ordered probit model based on outcomes defined as combinations of crime and bribe victimisation. The principal results include the evidence that while a male is more likely to be a corruption victim, a female is more exposed to crime, especially, serious crime. Older individuals and those living in the smaller towns and cities are less exposed to crime and corruption due presumably to their ability to form informal networks that act as protective mechanisms. With increasing levels of income and education, an individual is more likely to report both crime and bribe victimisation. A crime victim is more likely than a non victim to report receiving demands for a bribe. The results suggest that variables such as inequality, unemployment rate and population size have a strong effect on the country’s crime and corruption statistics though the sign and significance of the country effects are not always robust. However, the paper does provide robust evidence that a stronger legal system and a happier society result in a reduction in both crime and corruption. While the study finds that both crime and corruption rates decline as a country becomes more affluent, as measured by its per capita GNP at PPP, there is no evidence of a strong and uniformly negative impact of either crime or corruption on a country’s growth rate. There is limited OLS based evidence of a non linear relationship between growth and corruption rates, though the significance of the corruption effect on growth disappears on the use of IV estimation. The paper also provides evidence that there has been a decline in both crime and corruption during the latter half of the 1990s. This is true even after controlling for the individual and country characteristics.Crime Victimisation, Institutions, Happiness, Ordered Probit, Rule of Law.

'Bed and Board' in Lieu of salary : Women and Girl Children Domestics in Post Partition Calcutta (1951-1981)

Research on women's work has attempted to analyse how the interplay of market and patriarchy leads women and men to perform different economic roles in society. This segregation on the basis of gender or the sex-typing of work plays an important role both from the demand and supply sides in determining the work profiles of women and girl children. The present study attempts to see how a particular labour market, i.e. domestic service, a traditionally male domain, became segregated both by gender and age in post partition West Bengal (WB) and mainly in its capital city Calcutta. We have argued that the downward trend in industrial job opportunities in post independence WB accompanied by large scale immigration of women, men and children from the bordering East Pakistan, now Bangladesh, led to an unprecedented increase in labour force under conditions of stagnant investment. This in turn led to a decline in the wage rate. In such a situation poor refugee women in their frantic search for means of survival gradually drove out the males of the host population engaged in domestic service in urban WB by offering to work in return for a very low and often for no wage at all. Again, poor males from the neighboring states of Bihar, Orissa and UP constituted historically a substantial section of the Calcutta labour market and many of them were employed as domestics in a state known for its prevalence of domestic service in colonial India. The replacement of male domestics by females was further facilitated by the gradual decline in inter-state migration due to lack of employment opportunities in independent WB. The second stage in the changing profile of domestic service in urban WB was arguably set by the migrating girl children from the rural areas of the state to Calcutta city in search for employment between 1971 and 1981.gender roles, labour supply, labour demand, India

On the Impact of Piracy on Innovation in the Presence of Technological and Market Uncertainty

This paper analyses the effect of piracy on innovation in the presence of R&D competition with technological and market uncertainty. With a single innovating firm facing technological uncertainty, piracy unambiguously retards innovation. However, with R&D competition where firms face market and technological uncertainties, we show that piracy may enhance overall innovation. We also show that if the difference between the probabilities of success of the innovating firms is relatively large then piracy enhances the R&D investment and profit of the less efficient firm.Innovation, market uncertainty, R&D race, technological uncertainty

Does the Evidence on Corruption Depend on how it is measured? Results from a Cross Country Study on Micro Data sets

This study compares the evidence on corruption between alternative data sets. These include the Corruption Perceptions Indices (CPI) that are conventionally used and the micro data sets from the International Crime Victim Surveys (ICVS) and the World Bank Enterprise Surveys (WBES) that have been used in recent applications. While a comparison between the evidence from the CPI and WBES constitutes a comparison of perception versus reality, the comparison of evidence from ICVS and WBES can be construed as a comparison of individual with business corruption. The study finds several similarities and differences between the pictures on corruption yielded by the alternative data sets. For example, while in case of low income countries, perception of business corruption seems to be worse than that based on firms’ actual experience of doing business there, the reverse is true for high income countries. The magnitude of individual corruption is consistently lower than that of business corruption, with the gap between the two forms of corruption closing only for high income countries. As a country develops and commercial transactions increase, the mix of corruption changes in favour of business corruption. While the study finds evidence of a negative association between per capita GNP and corruption rates, none of the three data sets provides any evidence of negative association between growth and corruption rates. The study also finds that while improvement in human development indicators such as literacy are effective instruments in controlling individual corruption, the strengthening of institutions such as the legal system and the regulatory mechanism are likely to be more effective in combating business corruption. The strengthening of trust, whether via improved literacy and development of social networks or via a strong legal system, and an effective and transparent regulatory mechanism is the key to combating both forms of corruption. A methodological contribution of this study is the combination of the information of the characteristics of the respondent with the country level indicators in analysing the determinants of corruption. A significant difference between the two forms of corruption is that, after controlling for the respondent’s attributes and the country indicators, while individual corruption showed an increase over time, this was not the case with business corruption. The importance of introducing the country effects is seen from the sign reversal of the time coefficient estimate that occurs in case of both individual and business corruption once we control for the effects of the country of residence of the respondent. The overall message of this study is that the authorities need to distinguish between different forms of corruption in devising policy intervention. As the mix of individual and business corruption changes with economic development, so should the mix of policy instruments in tackling corruption. The results also underline the need to undertake more studies that investigate the sensitivity of the evidence on corruption to alternative data sets.Business Corruption, Kernel density graphs, Social Network, Human Development Indicator, Regulatory Mechanism

Resonating valence-bond physics on the honeycomb lattice

We study bond and spin correlations of the nearest-neighbour resonating valence bond (RVB) wavefunction for a SU($2$) symmetric $S=1/2$ antiferromagnet on the honeycomb lattice. We find that spin correlations in this wavefunction are short-ranged, while the bond energy correlation function takes on an oscillatory power-law form $D(\vec{r}) \sim \cos({\mathbf Q}\cdot {\vec{r}}) /|{\vec{r}}|^{\eta_w(2)}$, where ${\mathbf Q} = (2\pi/3, -2\pi/3)$ is the wavevector corresponding to "columnar" valence-bond solid order on the honeycomb lattice, and $\eta_w(2) \approx 1.49(3)$. We use a recently introduced large-$g$ expansion approach to relate bond-energy correlators of the SU($g$) wavefunction to dimer correlations of an interacting fully-packed dimer model with a three-dimer interaction of strength $V(g)=-\log(1+1/g^2)$. Putting $g=2$, we find numerically that the dimer correlation function $D^{d}(\vec{r})$ of this dimer model has power-law behaviour $D^{d}(\vec{r}) \sim \cos({\mathbf Q}\cdot {\vec{r}}) /|{\vec{r}}|^{\eta_d(2)}$ with $\eta_d(2) \approx 1.520(15)$, in rather good agreement with the wavefunction results. We also study the same quantities for $g=3,4,10$ and find that the bond-energy correlations in the SU($g$) wavefunction are consistently well-reproduced by the corresponding dimer correlations in the interacting dimer model.Comment: 10 pages; two-column prb format; 14 .eps figures; v2: version submitted to PRB; v3: published versio