![]() ![]() Why we are willing to pay for mega expensive things It is a form of conspicuous consumption – buying something not for its intrinsic utility but as a signal to others. Such “gifts” do not leave a transaction trail so are less likely to result in legal action against corrupt officials.Īnother explanation for the link between corruption and luxury spending is that corrupt individuals send signals about their “services” by demonstrating a lavish lifestyle beyond their official source of income. In countries where paying bribes to government officials to secure government contracts or operating licences is common practice, luxury goods are often used instead of direct monetary payments. More press freedom and information transparency help too, presumably because this increases the chance of corruption being exposed. Our results suggest stronger anti-corruption controls reduce luxury spending. ![]() We have also controlled for factors such as inequality, with demand for luxury goods increasing as the income gap widens. Greater spending on luxury goods is to be expected in richer nations and in international travel hubs such as Singapore, Hong Kong and Dubai. Our calculations make allowances for variables such as relative wealth and spending by tourists. We have cross-referenced these data with two corruption measures: the World Bank’s Control of Corruption Index, and Transparency International’s Corruption Perceptions Index. Collectively the 32 sample countries represent about 85% of the world’s GDP. The sample includes the major emerging economies (Brazil, China, India, Russia and South Africa) and major high-income countries (US, Japan and Germany). Our analysis covers all countries for which annual data on luxury spending per capita are obtainable, from 2004 to 2014. So too did the home of his attorney-general, Viktor Pshonka, which included a nest of Fabergé eggs. When the Viktor Yanukovych was deposed as Ukrainian president in 2014, for example, his palatial home revealed wealth far in excess of his official income. The same year Dutch authorities seized his US$120 million super-yacht at the request of a Swiss court.Įquatorial Guinea, meanwhile, ranks 141 out of 189 nations on the UN’s Human Development Index. Swiss authorities seized his fleet of luxury cars, including a Koenigsegg One:1 (one of just seven built, worth US$2 million) in 2016. The son of Teodoro Obiang Nguema Mbasogo, president since 1979, he was convicted of corruption by a French court in 2017. Last year, Brazilian customs officials found luxury watches worth an estimated US$15 million in the bags of the entourage of Teodorin Obiang, vice-president of Equatorial Guinea. This included 12,000 pieces of jewellery worth up to US$220 million, 423 watches worth US$19.3 million and 567 handbags worth more than US$10 million. Police raided his multiple homes and collected 280 boxes of luxury items estimated to be worth more than US$270 million. Right now, Malaysia’s former prime minister, Najib Razak, is on trial over the looting of billions of dollars from government accounts. Corrupt figuresĪnecdotal evidence of the connection between corruption and luxury items is easy to find. Nonetheless they could make a great gift to the world by pitching in to build the institutional architecture needed to combat corruption. We are not saying that luxury brands are doing anything criminal. Our findings confirm previous research, such as luxury car sales being substantially higher in OECD countries with higher perceived corruption levels. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |