Tugrul Gurgur

Localization and Corruption: Panacea or Pandora's Box?

An extensive literature on the relationship between decentralization (or localization) and corruption has developed in recent years. While some authors argue that there is a positive relationship between decentralization and corruption, others claim that decentralization in fact leads to a reduction in the level of corruption. This important policy question has not yet been laid to rest, since previous empirical work simply uses eclectic regressions and lacks a conceptual framework to discover the root causes of corruption. This paper attempts to fill this void by presenting a framework in identifying the drivers of corruption both conceptually and empirically in order to isolate the role of centralized decision-making on corruption. The following results emerge: 1) For a sample of 30 countries (developing and industrial), corruption is caused by: a lack of service-orientation in the public sector, weak democratic institutions, economic isolation (closed economy), colonial past, internal bureaucratic controls and centralized decision making. 2) Decentralization is found to have a negative impact on corruption, with the effect being stronger in unitary than in federal countries.

Does Corruption Affect Health and Education Outcomes in the Philippines

We examine the effect of corruption in municipal governments on health and education outcomes in the Philippines. We find that corruption lowers the immunization rate of children, delays the vaccination of newborns, prevents the treatment of patients, discourages the use of public health clinics, reduces satisfaction of households with public health services, and increases waiting time of patients at health clinics. Corruption also has a negative effect on education outcomes: it reduces test scores, lowers national ranking of schools, raises variation of test scores within schools and reduces satisfaction ratings. We also find that corruption affects public services in rural areas in different ways than urban areas, and that corruption harms the poor more than the wealthy

Government Effectiveness, Crime Rates and Crime Reporting

We use data on crime incidence and crime reporting from the International Crime Victimization Survey to analyze how governance influences crime incidence and crime reporting by households. We find that governance has a significant effect on the incidence and reporting rates of some crime categories, especially theft, even after controlling for a potential reverse causality problem. We also find that governance and income inequality does not have the same effect in every household; on the contrary it is conditional on personal, social and economic characteristics. Urban, female, or poor households are more likely to experience a crime incidence and less likely to report these crimes if they live in countries with high income inequality and poor governance.

Crude Oil Price and Retail Price of Gasoline: An Empirical Analysis of Asymmetric Relationship

In this study, we provide empirical evidence on the asymmetric relationship between the cost of crude oil and retail price of gasoline in Turkey. We disentangle the cost channel into two parts: the crude oil price in foreign currency and exchange rate. Then, we estimate the determinants of retail prices via an NARDL model that addresses asymmetry in both the long-run and the short-run. We show that the impacts of the two channels differ in a significant way. In particular, the transmission of an exchange rate shock to the retail price is more rapid and more significant in magnitude compared to that of a shock to crude oil price in foreign currency. Our results show that the source of asymmetric relationship is mainly exchange rate. While the response of retail price to currency depreciation is more rapid and larger in magnitude compared to that of appreciation, its response to the movements in crude oil price in foreign currency is largely symmetric. Finally, the estimation results reveal that moderate changes in exchange rate and international price of crude oil are hardly reflected to the retail price.