Corruption and Mental Health: Evidence From Vietnam

Abstract

While there is substantial corruption in developing countries, the costs imposed by corruption on individuals and households are little understood. This study examines the relationship between exposure to local corruption and mental health, as measured by depressive symptoms. We use two large data sets – one cross-sectional and one panel – collected across rural Vietnam. After controlling for individual and regional characteristics, we find strong and consistent evidence that day-to-day petty corruption is positively associated with psychological distress. Our results are robust to a variety of specification checks. Further, we find that the relationship between corruption and mental health is stronger for women, and that there are no heterogeneous effects by poverty status. An examination of the underlying mechanisms shows that reductions in income and trust associated with higher corruption may play a role. Finally, using a difference-in-difference estimation strategy, we also provide suggestive evidence that a recent high profile anti-corruption campaign had significant positive effects on mental health. Overall, our findings indicate that there may be substantial psychosocial and mental health benefits from efforts to reduce corruption and improve rural governance structures.

Note:
Funding Statement: We also thank UNUWIDER and the University of Copenhagen for financial support. These institutions had no involvement in study design, data collection, analysis, and or interpretation. The usual caveats apply.

Declaration of Interests: The authors have no conflicts of interests of any kind.

Keywords: Corruption, Anti-Corruption, Mental Health, Depression, Vietnam

JEL Classification: I3, I15, O12, D73, P3