What positions should women occupy to reduce corruption?

Responsible researcher: Viviane Pires Ribeiro

Paper Title: Women and corruption: What positions must they hold to make a difference?

Authors: Chandan Kumar Jha and Sudipta Sarangi

Location of Intervention: European Countries

Sample Size: 155 regions from 17 European countries

Big theme: Gender

Variable of Main Interest: Corruption

Type of Intervention : Analysis of the positions that women should occupy to reduce corruption

Methodology: Instrumental variable analysis

Gender inequality still persists in all countries, it exists in access to education, work and participation in economic and political activities. Given the debate that emerged just over a decade ago that women potentially behave differently from men in many economic circumstances, Jha and Sarangi (2018) examine in what roles women have an impact on corruption, focusing on participation women in the workforce and their presence in parliament. The study's findings suggest that female participation in politics should not only be encouraged to achieve gender equality, but also because it has positive externalities – a negative impact on corruption.

Assessment Context

Corruption remains an important issue in both developed and developing countries because of its negative impact on economic growth and development outcomes. Just over a decade ago, the debate arose that women possibly behave differently than men in many economic circumstances.

In the literature dealing with the impact of gender on corruption, there are studies that found a negative correlation between female presence in parliament and corruption, while other studies express concerns that this observed negative association between gender and corruption was not causal and probably motivated by omitting other factors that may be correlated with women's participation and/or corruption in a country. In this context of intense debate, Jha and Sarangi (2018) address the concerns raised in this literature, first by looking for a causal relationship between gender and corruption through instrumental variable analysis and, second, by adopting a more subtle approach to this problem, identifying the different economic roles that women can take vis-à-vis corruption and investigating the impact of each on corruption.

Intervention Details

Since much of the literature on corruption is affected by the lack of instruments or weak instruments, Jha and Sarangi (2018) make a methodological contribution by making inferences based on Moreira's (2003) conditional likelihood ratio approach, using the data from 155 regions in 17 European countries.

The main measure of corruption used in the study is the Control of Corruption Index (CCI) published by the World Bank. The ICC is a continuous variable that takes values ​​from -2.5 (most corrupt) to 2.5 (least corrupt). The authors used the negative ICC in all specifications so that a higher number indicates more serious corruption. The ICC was constructed so that its mean was zero and the standard deviation was equal to 1. The objective of the ICC is to capture perceptions of the extent to which public power is exercised for private gain, including small and large forms of corruption, as well as as "capture" of the State by elites and private interests.

Data for women's labor force participation (WP) were from the International Labor Organization (ILO). The United Nations Statistics Division (UNSD) provided data on the proportion of women in administrative positions and the proportion of women in decision-making positions. Data on the percentage of women in parliament were compiled by the Inter-Parliamentary Union (IPU) and were taken from the World Bank. All measures of female participation used by the authors are the percentage of women in the respective category.

The World Bank's Gross National Income per capita – formerly Gross National Product (GNP) per capita – in US dollars was used as a measure of income. The Association of Religion Data Archive (ARDA) provided data on the proportions of Christians and Muslims in the total population in 2005, the last year for which such data was available. Data on the countries' colonial history were taken from Treisman (2007). Freedom House assigns a score of 1 to 7 for political rights - a score of 1 indicates that citizens enjoy a wide range of political rights, while a rating of 7 implies few or no political rights.

Methodology Details

In the econometric model, the authors considered the corruption index in country i as the dependent variable. The other independent variables are: the proportion of women in different occupations in country i , depending on the specification; the GNP per capita; political rights; proportions of Christians and Muslims in the total population; the dummy variable that takes the value 1 if the country is a former British colony and zero otherwise; and another dammy variable that takes the value 1 if the country has never been colonized and zero if it has a colonial past.

GNP per capita was added as a control variable in all specifications because countries with higher incomes may be able to restrict corruption more effectively than developing countries. Therefore, the authors expect that strong political and democratic institutions will have less corruption. Therefore, the "political rights" published by Freedom House were included as an additional regressor in the model. It has been found in the literature that cultural factors and social norms have an impact on corruption. To capture these aspects, the authors included proportions of Christians and Muslims in the total population as additional regressors. Furthermore, recent studies have found that a country's colonial past, origin can affect corruption through its impact on economic and political institutions. It is argued that a colonized country inherits the institutional configuration of its colonizer, which is likely to persist after independence. In this sense, a dummy “Former British Colony” and “Never colonized” were included in the model.

The authors used instrumental variable analysis that addresses the issues of omitted variable bias and potential reverse causality, as well as instruments for establishing causality and making inferences based on the conditional likelihood ratio approach proposed by Moreira (2003), the statistical Anderson-Rubin (Anderson and Rubin, 1949) and the LM-J statistic (Kleibergen, 2002).

Results

Jha and Sarangi (2018) provide robust evidence that the presence of women in parliament has a causal and negative impact on corruption, while other measures of female participation in economic activities have no effect. Furthermore, this negative relationship between women's presence in government and corruption is also found in a regional analysis of 17 European countries, alleviating concerns that the relationship is driven by unobservable country-fixed characteristics. Subsequently, the authors show that this relationship does not disappear when women gain similarity in social status.

In statistical terms, the results indicate that the relationship between the presence of women in politics is not only statistically significant, but also considerable. Even with the smaller Ordinary Least Squares coefficient (instrumental variable), an increase of one standard deviation (9.77%) in women's participation in parliament is associated with an improvement in the perception of corruption expected by 0.26 (0.45 ) points. This is considerable given that the index itself is measured on a scale of -2.5 to 2.5 and the standard deviation of the index is 1.03. In the regional analysis, a standard deviation increase (about 10 percentage points) in women's participation in local government is associated with a significant reduction in bribery by one-tenth of a standard deviation.

Public Policy Lessons

Jha and Sarangi (2018) point out that the term “workforce” used in previous studies is a very broad measure and does not make clear how women affect corruption. For example, women can affect corruption if they are less corrupt and accept fewer bribes than men. Alternatively, women can affect corruption when they are in positions of power by drafting and implementing strict anti-corruption laws within their organizations or better enforcing existing laws. Since female labor force participation consists of women in both roles, it is important to distinguish which of these roles (or a combination of both) is associated with lower corruption. To capture these roles, the authors present two additional measures of female participation in economic activities: (i) the proportion of women in administrative positions and (ii) the proportion of women as legislators and managers.

The analysis shows that the presence of women in the workforce, in administrative positions and in senior decision-making positions, is not significantly associated with corruption in a country. This lack of relationship is noteworthy as it suggests that women are not inherently less corrupt. Furthermore, the results indicate that: women's participation in local government is associated with less bribery; and women have a systematic negative impact on corruption only if they are represented in parliaments, implying that the effect on corruption is possibly through policy formulation.

Furthermore, it is possible to refute the speculation that observed gender differences in corruption are driven by gender differences in social status. In fact, the analysis suggests the opposite: corruption is lower if women enjoy greater equality of status with men, possibly because they are better able to affect policymaking.

Finally, Jha and Sarangi (2018) raise the following question: how do women reduce corruption by being in politics? A possible answer, according to the authors, could be that they favor policies different from those defended by men. Recent research has extensively explored the political implications of gender representation in government. It was reported that women in local government in India allocated a greater share of the budget to public goods more closely associated with women's concerns as well as the provision of basic infrastructure needs and were more concerned about whether subsidies were provided to the target group without corruption . Furthermore, female political representation was also found to be positively associated with state spending on health and educational outcomes. At the same time, there are also studies that show that education reduces corruption.

References

JHA, Chandan Kumar; SARANGI, Sudipta. Women and corruption: What positions must they hold to make a difference?. Journal of Economic Behavior & Organization , vol. 151, p. 219-233, 2018.