This manuscript uses a global and comprehensive approach based on 1.14 million observations to investigate whether the effect of corruption can be measured towards safety qualities of vessels. Since safety qualities of vessels are influenced by many factors and the effect of corruption can be confounded by their interactions, a multi-step approach in used at ship. The findings confirm the hypothesis that port states with higher perceived corruption are less likely to detain vessels and that flag states or ship owners located in countries associated with higher perceived corruption are more likely to have very serious incidents as the operating environment might facilitate substandard shipping and weaker enforcement of international conventions or increased operating costs that can influence safety qualities of vessels in economic hardship. The findings also revealed the degree of underreporting for serious incidents by flag states. The results support the establishment of accountability frameworks and current efforts at the International Maritime Organization (IMO) to address corruption to support sustainable development goal 16 (SDG 16). Relevant policy implications could be to strengthen the fight against corruption via IMO’s Member State Audit Scheme and Facilitation Committee in general and specifically by strengthening training and enforcement of the Code of Good Conduct for Port State Control Inspectors. To enhance transparency, the Global Integrated Ship Information System could be adjusted to include an option to report corruption directly by ship owners and operators to IMO and flag states and mandatory reporting requirements should be revised to capture all serious incidents to GISIS

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Econometric Institute Research Papers
Department of Econometrics