Historical origins of corruption in the Romanian public health system - path dependency and contagion effect

In this paper, we estimate the long-lasting influence of the former Habsburg Empire's border on the territory of Romania, specifically on the prevalence of corrupt behaviour and practices in health services.

Employing microdata from the 2016 Life in Transition Survey and applying ordered probit regression, we explore the hypothesis that the geographical proximity of respondents' residences to the former imperial border-restricting the analysis within a bandwidth of 50 km, 75 km or even 100 km on either side - significantly influences current individual tendencies towards corrupt behaviour.

The results indicate that individuals in Transylvania living in the immediate vicinity of the former border of the Habsburg Empire (no more than 75 km away) show a higher propensity towards corrupt behaviours, similar to those from Moldova and Wallachia who reside in the same bandwidth but to the east of the former historical border. Interestingly, on one hand, after a series of tests with various relevant factors, the contagion effect is observed from right to left, meaning from those in Moldova and Wallachia towards those in Transylvania, and not the other way around as might be expected based on other previous studies. On the other hand, individuals living more than 75 kms west of the former historical border show clear reluctance to engage in informal payments and gift-giving when interacting with the public health system as patients.

By rigorously controlling for various variables that comprehensively show different legacies of the communist regime, our results confirm the persistence of these influences across different bandwidths, thereby corroborating the hypothesis of path dependence influenced by the former Habsburg Empire.