Bo Rothstein Blavatnik School of Government and Nuffield College University of Oxford Inequality and Corruption
Bo RothsteinBlavatnik School of Government
andNuffield College
University of Oxford
Inequality and Corruption
Regional difference in QoG in Europe Blue/black = high QoG – Yellow/green=low QoG
Level of Democracy and Human Development Index
Quality of Government and Human Development
What works against inequality
• Answer: Public provision of basic resources through universal social policies
• Health care, education, public transportation, support to families, etc.
• Universal social policies create more redistribution than selective ones
• However, such policies will only be supported if quality of institutions is high
Trust in institutions and social solidarity: A huge leap of faith?
• Can your trust that the state be able to fairly collect enough fees/taxes?
• Can you trust that the state will handle the money in a responsible way or will policies be drowned in corruption etc.
• Can you trust that the state will be able to deliver?
• Can you trust that the state will deliver in an acceptable way?
• Can you trust that the state will be able to handle abuse or overuse?
Trust and institutions• Selective social policies often create
suspicion regarding fairness in implementation
• Means testing leads to negative stereotyping
• Universal social policies are based on equal treatment and thus less bureaucratic discretion and intrusion
• Produces a sense of equality of opportunity and institutional fairness
Empirical results: Country level
• The effect of left cabinets on the level of welfare state effort is dependent on the level of quality in government
• A country with the best possible level of QoG will spend 21 percentage more of its GDP on the welfare state compared to a country with the lowest possible level of QoG
Empirical results: Individual level
• A person who is in favour of more socio-economic equality, but who lives in a country where (s)he perceives there is low quality of government, prefers lower taxes and less social spending
• The similar type of person who lives in a country where s(he) perceives the quality of government institutions to be OK, is willing to pay higher taxes for more social spending
Corruption and Inequality: The take home lessons
• Corruption does not only work as an extra tax for poor people
• Corruption will also make it much harder to get broad support for universal social policies
• Corruption and low quality of government is thus probably ”the enemy number one” for alleviating poverty and inequality