Why is corruption -the misuse of public office for private gain -perceived to be more widespread in some countries than others? Different theories associate this with particular historical and cultural traditions, levels of economic development, political institutions, and government policies. This article analyzes several indexes of 'perceived corruption' compiled from business risk surveys for the 1980s and 1990s. Six arguments find support. Countries with Protestant traditions, histories of British rule, more developed economies, and (probably) higher imports were less 'corrupt'. Federal states were more 'corrupt'. While the current degree of democracy was not significant, long exposure to democracy predicted lower corruption.

I review recent efforts by political scientists and economists to explain cross-national variation in corruption using subjective ratings, and examine the robustness of reported findings. Quite strong evidence suggests that highly developed, long-established liberal democracies, with a free and widely read press, a high share of women in government, and a history of openness to trade, are perceived as less corrupt. Countries that depend on fuel exports or have intrusive business regulations and unpredictable inflation are judged more corrupt. Although the causal direction is usually unclear, instrumenting with income as of 1700 suggests higher development does cause lower perceived corruption. However, controlling for income, most factors that predict perceived corruption do not correlate with recently available measures of actual corruption experiences (based on surveys of business people and citizens that ask whether they have been expected to pay bribes recently). Reported corruption experiences correlate with lower development, and possibly with dependence on fuel exports, lower trade openness, and more intrusive regulations. The subjective data may reflect opinion rather than experience, and future research could usefully focus on experience-based indicators.

How does political decentralization affect the frequency and costliness of bribe-extraction by corrupt officials? Previous empirical studies, using subjective indexes of perceived corruption and mostly fiscal indicators of decentralization, have suggested conflicting conclusions. In search of more precise findings, we combine and explore two new data sources-an original cross-national data set on particular types of decentralization and the results of a firm level survey conducted in 80 countries about firms' concrete experiences with bribery. In countries with a larger number of government or administrative tiers and (given local revenues) a larger number of local public employees, reported bribery was more frequent. When local-or central-governments received a larger share of GDP in revenue, bribery was less frequent. Overall, the results suggest the danger of uncoordinated rent-seeking as government structures become more complex.

A vast literature suggests that economic inequality has important consequences for politics and public policy. Higher inequality is thought to increase demand for income redistribution in democracies and to discourage democratization and promote class conflict and revolution in dictatorships. Most such arguments crucially assume that ordinary people know how high inequality is, how it has been changing, and where they fit in the income distribution. Using a variety of large, cross‐national surveys, we show that, in recent years, ordinary people have had little idea about such things. What they think they know is often wrong. Widespread ignorance and misperceptions emerge robustly, regardless of data source, operationalization, and measurement method. Moreover, perceived inequality—not the actual level—correlates strongly with demand for redistribution and reported conflict between rich and poor. We suggest that most theories about political effects of inequality need to be reframed as theories about effects of perceived inequality.