Do public sector wages affect corruption?

Testing the fair wage hypothesis across countries and in Russia

Scientific Essay from the year 2010 in the subject Politics - International Politics - Region: Russia, grade: 68 (B+), University College London, course: Year Abroad Project, language: English, abstract: This paper will analyse one aspect of corruption that has been very present in the corruption literature after mid-1990s: the effect of wages on corruption. Van Rijckeghem's and Weder's model of the fair wage hypothesis will be first explained in this paper and then used on a cross-sectional study of 29 countries and on data from within Russia between the years 2001 - 2005. In doing so, Occam's Razor will be applied by only analysing the effects of wages on corruption, ignoring all historic and institutional aspects of a particular country. The results do not prove the fair wage hypothesis beyond doubt, although some evidence point that satisfactory wages will reduce corruption.