Do public sector wages affect corruption‪?‬

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.