Combating Corruption: On the Interplay between Institutional Quality and Social Trust

Abstract

The aim of this paper is to explore under which conditions institutional quality leads to lower corruption. A model of a simple economy where firms both chose between bribing or not bribing bureaucrats to avoid costs and between entering the official or unofficial economy shows that the effects of increasing institutional quality may be ambiguous due to perverse effects of institutions in the unofficial economy.Employing a recent index of corruption based on objective data, the paper shows that formal institutions are more effective in combating corruption in countries with high levels of social trust. The paper concludes by discussing the welfare and political implications of the findings.JEL Codes: D72, K42, Z13

An Offer You Can’t Refuse: Murdering Journalists as an Enforcement Mechanism of Corrupt Deals

“…In columns 1, 3 and 4, the full interaction in the second quintile of press freedom remains of roughly the same size, indicating a corruption elasticity of about .5. This is pertinent since all of our estimates could also in principle reflect deeper cultural factors correlated with corruption (cf., Bjørnskov, 2011;Treisman, 2007). Such cultural characteristics are approximately time-invariant within a time horizon such as the one in our study.…”

“…We follow a basic game-theoretic approach similar to that used in much of the recent literature (e.g., Yavas, 2007;Frey and Torgler, 2008;Dreher et al, 2009;Bjørnskov, 2011). We primarily use this model as a background of our empirics and to derive conditions under which we would expect to see a clear connection between corruption and the murder of journalists.…”

“…In recent years, much research has therefore been devoted to identifying the specific problems associated with it, as well as why some countries are evidently more corrupt than others (Aidt, 2003;Treisman, 2007;Dreher et al, 2007;Bjørnskov, 2011).…”

Güven, Bürokrasi Ve Refah Devleti

“…Uslaner (2008)'in sonuçları eyaletler arasındaki kişi başına düşen gelir ve gelir dağılımı adaletsizliği farklılıkları gibi önemli faktörler bağımsız değiş-kenler olarak modele dahil edildiğinde dahi güvenin yolsuzluk algısını azalttığını göstermektedir. Bjørnskov (2010Bjørnskov ( , 2011 tarafından yapılan ampirik çalışmalar da güvenin yolsuzluğu azalttığını göstermektedir.…”

“…In sum, trust is a determining factor in people's thinking of whether they will cause harm to their fellow citizens if they engage in corruption (Karagül, 2012, p. 129). Uslaner (2008) and Bjørnskov (2010Bjørnskov ( , 2011 show empirically that social trust has negative effect on corruption.…”