Accountability and Corruption: Political Institutions Matter

Abstract

This study uses a cross-country panel to examine the determinants of corruption, paying particular attention to political institutions that increase accountability. Even though the theoretical literature has stressed the importance of political institutions in determining corruption, the empirical literature is relatively scarce. Our results confirm the role of political institutions in determining the prevalence of corruption. Democracies, parliamentary systems, political stability, and freedom of press are all associated with lower corruption. Additionally, common results of the previous empirical literature, related to openness and legal tradition, do not hold once political variables are taken into account.

Determinants of Corruption in Developing Countries

“…So increase in press freedom has reduced the level of corruption. These empirical findings are supported by the previous findings of Lederman et al (2005) and Brunetti-Weder (2003). The value of R-square is 0.13, which shows that only 13% variation in the level of corruption is explained by non-economic factors.…”

“…Empirically this issue was tested by Lederman et al (2005) and Brunetti-Weder (2003), and they found that higher degree of press freedom will lead to reduction in the level of corruption. To see the relationship between these two in developing countries, we have formulated the following hypothesis:…”

Ethical Dilemmas in a California City: Lessons in Leadership, Transparency, and Accountability

“…The largest bribes were paid to the television media, followed by bribes to politicians and judges. Lederman et al (2005) also found similarly beneficial outcomes correlating with the levels of freedom provided the press in society.…”

Turkish Voter Response to Government Incompetence and Corruption Related to the 1999 Earthquakes

“…Costas et al (2011), Freille et al (2007), Lederman et al (2005), Adsera et al (2003), Brunetti and Weder (2003), and Besley and Burgess (2002) provide evidence on the importance of a free press in reducing corruption. However, as Johnson et al (2011), Chang et al (2010), and Golden (2006) point out, corruption exists even in advanced democracies.…”

“…Corrupt incumbents may lose votes but not enough to deny them re-election, as long as they keep the level of corruption in check and do not allow it to damage overall economic performance significantly. This would explain why Pellegrini and Gerlagh (2008) and Lederman et al (2005) find the level of corruption to be lower, and Drury et al (2006), its harm on economic growth to be less, in democratic countries.…”