Corruption Determinants, Geography, and Model Uncertainty

Abstract: This paper aims to identify the robust determinants of corruption after integrating out the effects of spatial spillovers in corruption levels between countries. In other words, we want to specify which variables play the most critical role in determining the corruption levels after accounting for the effects that neighbouring countries have on each other. We collected the annual data of 115 countries over the 1985-2015 period and used the averaged values to conduct our empirical analysis. Among 39 predictors of corruption, our spatial BMA models identify Rule of Law as the most persistent determinant of corruption.