All papers
Causal interaction between Petty and Grand Corruption: A threshold non-linear analysis
Corruption has two main dimensions: Petty Corruption – refers to small payments to low-ranking officials, and Grand Corruption – concerns large payments to high-ranking officials. Each dimension has different negative effect on society, but their coexistence adds other problems, including a potential mutual contamination effect. Analyzing such an effect is important in terms of policy, especially if the contamination runs in one direction only. Since fighting corruption is very costly, such an analysis may also reveal additional benefits, of being able to devote more resources to curbing Grand (or Petty) Corruption as a priority. Based on a sample of yearly observations from 133 developed and developing countries over the period 1948-2021, results show unambiguously that Petty Corruption causes Grand Corruption, whereas the reverse effect is not clearly supported. Results support the theoretical models proposed in the scarce literature on this topic.
Fredj Fhima
Ridha Nouira, Associate-Professor of Economics, University of Sousse, Tunisia., Khalid Sekkat, Professor of Economics, University of Brussels, Belgium.
Year of publication 2026