Measuring Corruption, Misjudging Inequality: Revisiting the Corruption-Inequality Relationship

The relationship between corruption and income inequality has been widely studied, yet findings remain inconclusive due to limitations in measurement and methodology. This study reevaluates this relationship using a diverse set of corruption indicators and statistical approaches to reassess the stability of previous findings. Our analysis reveals that the effect of corruption on inequality is highly sensitive to the choice of indicators and model specifications, with conventional measures, such as the Corruption Perceptions Index (CPI), often providing misleading results. These findings challenge the notion that corruption has a uniform impact on inequality and highlight the need to rethink policy recommendations that rely on these standard measures. By demonstrating how different corruption metrics are associated with divergent outcomes, this study underscores the importance of corruption measurement in understanding the relationship between corruption and income distribution