Determinants of Extreme Wealth: the Role of Corruption

The aim of the paper is to determine the effect of corruption on extreme wealth of individuals included in Forbes list of super-rich over the period 2006-2015. The methodology used is sys-GMM since it allows to control heterogeneity/ endogeneity among individuals. Three novel and different measures of direct corruption are used. The main finding shows that structural corruption positively affects individual extreme wealth, in a context of political/institutional, economic and personal factors. Although it is identified that sporadic or one-time corruption limits extreme wealth. Nevertheless, it is also found that the extreme accumulation is based on a combination of factors, such as meritocratic, non-meritocratic, and personal traits. In any case, this tends to perpetuate the corrupt systems and their accumulated effect on elites. Based on the foregoing, this research recommends certain corruption control mechanisms such as: the establishment of a global tax on extreme wealth, teamwork between the company, civil society and the government, public and private anti-corruption measures and a public investment of high quality that promotes more public well-being.