Academic journal article Contemporary Economic Policy

On the Determinants of Educational Corruption: The Case of Ukraine

Academic journal article Contemporary Economic Policy

On the Determinants of Educational Corruption: The Case of Ukraine

Article excerpt

I. INTRODUCTION

Recent research has identified education as one of the sectors gravely infected by corruption. Educational corruption is by no means in its embryonic development; UNESCO (1) has classified it as a global problem. In fact, it represents a critical matter of interest to economists because it entails potentially harmful implications for labor market outcomes through reduced returns to education (Heyneman, Anderson, and Nuraliyeva 2007) and destruction of selection mechanisms created by educational institutions (Heyneman 2004); for the quality and accumulation of human capital (Osipian 2012); for the optimal allocation of talent (Fershtman, Murphy, and Weiss 1996); and for the quality of education whose impact is identified to reduce economic growth (Hanushek 2002; Hanushek and Kimko 2000), and inhibit economic development (Delgado, Henderson, and Parmeter 2013). While previous research has identified the effects of educational corruption on economic outcomes, our article seeks to fill a gap in the literature by exploring the relationship between educational corruption and a set of potential explanatory variables, using survey data from Ukraine.

Educational corruption is defined as: "the abuse of authority for personal as well as material gain" (Heyneman (2004)). Given the willingness of educators to exercise their authority in return for material gain (cash, gifts, etc.), students may participate in such mutually beneficial agreements if they believe better performance in education opens doors toward better job opportunities with higher compensation or social status. Students may also bribe to circumvent selection mechanisms or quality measures in place to distinguish themselves from their fellow students with the expectation of some other form of current or future gain. Such practices include, but are not limited to, bribing for university admission, high marks, or even paying for degrees. Educational corruption, however, is not limited to student-faculty exchange. The so-called "taxonomy" of educational corruption suggests that administrators and staff are also involved either through the embezzling of funds or by charging for services which are supposed to be offered for free (Rumyantseva 2005).

The purpose of this article is to investigate the relationship between educational corruption in Ukraine and a set of potential explanatory variables. Our contribution is threefold: First, we utilize a unique data set in order to examine both objective self-reported corruption involvement and subjective perceptions of corruption's existence, as opposed to only the subjective measures typically used. Second, we estimate the probability of students bribing on the following occasions: (1) exams (resit an exam), (2) credit (pass a test), (3) term papers, and (4) university admission. Third, due to the high probability of misreporting by survey respondents we address the possibility and implications of misclassification for the response variables, showing that the estimated coefficients identify the minimum impact of each of the covariates on actual bribing behavior. For estimation, we suggest a new nonparametric approach which places no restrictions on the error distribution and directly estimates the conditional density. We show that this approach is capable of capturing some common types of endogeneity likely to be present in our specific application.

To investigate our question of interest we use survey data from Ukraine. Despite the numerous anti-corruption projects implemented by the European Union and the United Nations Development Program, corruption in Ukraine is rampant in most sectors: e.g., police, courts, central authorities, mass media, MPs. Martsynkiv, Khutkyi and Reed (2006) report that Ukrainian citizens have a high level of both corruption perceptions and tolerance; nearly half are willing to bribe if needed, with one-fifth admitting to having paid a bribe in 2005. …

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