IDEAS home Printed from https://ideas.repec.org/a/gam/jjrfmx/v14y2021i10p492-d656791.html
   My bibliography  Save this article

Democracy and Corruption

Author

Listed:
  • Markus Brueckner

    (Research School of Economics, Australian National University, Kingsley, ACT 2601, Australia)

Abstract

I examine the relationship between democracy and the perceived risk of corruption in a panel of 130 countries. My panel model controls for country fixed effects and enables the estimation of a within-country relationship between democracy and corruption. My main finding is that democracy significantly reduces the risk of corruption, but only in countries where ethnic fractionalization is low. In strongly fractionalized countries a transition from autocracy to democracy does not significantly reduce corruption. One explanation for these findings is that the corruption-reducing effect of greater accountability of politicians under democracy is undermined by the common pool problem; fractionalization increases the severity of the common pool problem.

Suggested Citation

  • Markus Brueckner, 2021. "Democracy and Corruption," JRFM, MDPI, vol. 14(10), pages 1-14, October.
    • Handle: RePEc:gam:jjrfmx:v:14:y:2021:i:10:p:492-:d:656791
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1911-8074/14/10/492/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1911-8074/14/10/492/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Esteban, Joan & Ray, Debraj, 1994. "On the Measurement of Polarization," Econometrica, Econometric Society, vol. 62(4), pages 819-851, July.
    2. Jakob Svensson, 2005. "Eight Questions about Corruption," Journal of Economic Perspectives, American Economic Association, vol. 19(3), pages 19-42, Summer.
    3. Kaufmann, Daniel & Kraay, Aart & Mastruzzi, Massimo, 2007. "Governance Matters VI: Aggregate and Individual Governance Indicators, 1996-2006," Policy Research Working Paper Series 4280, The World Bank.
    4. Torsten Persson & Guido Tabellini, 2006. "Democracy and Development: The Devil in the Details," American Economic Review, American Economic Association, vol. 96(2), pages 319-324, May.
    5. Alberto Alesina & Reza Baqir & William Easterly, 1999. "Public Goods and Ethnic Divisions," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(4), pages 1243-1284.
    6. Kevin M. Murphy & Andrei Shleifer & Robert W. Vishny, 1991. "The Allocation of Talent: Implications for Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(2), pages 503-530.
    7. Robert J. Barro, 1999. "Determinants of Democracy," Journal of Political Economy, University of Chicago Press, vol. 107(S6), pages 158-183, December.
    8. Besley, Timothy & Coate, Stephen, 1998. "Sources of Inefficiency in a Representative Democracy: A Dynamic Analysis," American Economic Review, American Economic Association, vol. 88(1), pages 139-156, March.
    9. Alberto Alesina & Eliana La Ferrara, 2003. "Ethnic Diversity and Economic Performance," Harvard Institute of Economic Research Working Papers 2028, Harvard - Institute of Economic Research.
    10. Olken, Benjamin A., 2006. "Corruption and the costs of redistribution: Micro evidence from Indonesia," Journal of Public Economics, Elsevier, vol. 90(4-5), pages 853-870, May.
    11. Ritva Reinikka & Jakob Svensson, 2004. "Local Capture: Evidence from a Central Government Transfer Program in Uganda," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(2), pages 679-705.
    12. Torsten Persson & Gérard Roland & Guido Tabellini, 1997. "Separation of Powers and Political Accountability," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(4), pages 1163-1202.
    13. Kouramoudou Kéïta & Hannu Laurila, 2021. "Corruption and Tax Burden: What Is the Joint Effect on Total Factor Productivity?," Economies, MDPI, vol. 9(1), pages 1-16, March.
    14. Gerard Padro i Miquel, 2006. "The Control of Politicians in Divided Societies: The Politics of Fear," NBER Working Papers 12573, National Bureau of Economic Research, Inc.
    15. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    16. Ritva Reinikka & Jakob Svensson, 2005. "Fighting Corruption to Improve Schooling: Evidence from a Newspaper Campaign in Uganda," Journal of the European Economic Association, MIT Press, vol. 3(2-3), pages 259-267, 04/05.
    17. Paolo Mauro, 1995. "Corruption and Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(3), pages 681-712.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yan Leung Cheung & P. Raghavendra Rau & Aris Stouraitis, 2012. "How much do firms pay as bribes and what benefits do they get? Evidence from corruption cases worldwide," NBER Working Papers 17981, National Bureau of Economic Research, Inc.
    2. Christopher L. Ambrey & Christopher M. Fleming & Matthew Manning & Christine Smith, 2016. "On the Confluence of Freedom of the Press, Control of Corruption and Societal Welfare," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 128(2), pages 859-880, September.
    3. Oana Borcan & Mikael Lindahl & Andreea Mitrut, 2017. "Fighting Corruption in Education: What Works and Who Benefits?," American Economic Journal: Economic Policy, American Economic Association, vol. 9(1), pages 180-209, February.
    4. repec:lic:licosd:24009 is not listed on IDEAS
    5. Yan-Leung Cheung & P. Raghavendra Rau & Aris Stouraitis, 2021. "What Determines the Return to Bribery? Evidence from Corruption Cases Worldwide," Management Science, INFORMS, vol. 67(10), pages 6235-6265, October.
    6. Andrew Hodge & Sriram Shankar & D. S. Prasada Rao & Alan Duhs, 2011. "Exploring the Links Between Corruption and Growth," Review of Development Economics, Wiley Blackwell, vol. 15(3), pages 474-490, August.
    7. Roberto Burguet & Juan-José Ganuza & José García-Montalvo, 2016. "The Microeconomics of Corruption. A Review of Thirty Years of Research," Working Papers 908, Barcelona School of Economics.
    8. Alberto Chong & Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer, 2014. "Letter Grading Government Efficiency," Journal of the European Economic Association, European Economic Association, vol. 12(2), pages 277-299, April.
    9. Krisztina Kis-Katos & Günther G. Schulze, 2013. "Corruption in Southeast Asia: a survey of recent research," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 27(1), pages 79-109, May.
    10. Bello K. Ajide, 2020. "Fragmentation and financial development in Sub-Saharan Africa Countries: the case of diversity debit versus diversity dividend theses," Economic Change and Restructuring, Springer, vol. 53(3), pages 379-428, August.
    11. Claudio Ferraz & Frederico Finan & Diana Belo Moreira, 2009. "Corrupting Learning: Evidence from Missing Federal Education Funds in Brazil," Textos para discussão 562, Department of Economics PUC-Rio (Brazil).
    12. Friedman, Willa, 2018. "Corruption and averting AIDS deaths," World Development, Elsevier, vol. 110(C), pages 13-25.
    13. Ferraz, Claudio & Finan, Frederico & Moreira, Diana B., 2012. "Corrupting learning," Journal of Public Economics, Elsevier, vol. 96(9-10), pages 712-726.
    14. Imam, M. & Jamasb, T. & Llorca, M. & Llorca, M., 2018. "Power Sector Reform and Corruption: Evidence from Electricity Industry in Sub-Saharan Africa," Cambridge Working Papers in Economics 1801, Faculty of Economics, University of Cambridge.
    15. Mohamed Dridi, 2014. "Corruption and Education: Empirical Evidence," International Journal of Economics and Financial Issues, Econjournals, vol. 4(3), pages 476-493.
    16. Victor Ginsburgh & Shlomo Weber, 2020. "The Economics of Language," Journal of Economic Literature, American Economic Association, vol. 58(2), pages 348-404, June.
    17. Qu, Guangjun & Sylwester, Kevin & Wang, Feng, 2016. "Anticorruption and Growth: Evidence from China," MPRA Paper 72190, University Library of Munich, Germany.
    18. Timothy Besley & Torsten Persson, 2011. "Pillars of Prosperity: The Political Economics of Development Clusters," Economics Books, Princeton University Press, edition 1, number 9624.
    19. Auriol, Emmanuelle & Straub, Stéphane & Flochel, Thomas, 2016. "Public Procurement and Rent-Seeking: The Case of Paraguay," World Development, Elsevier, vol. 77(C), pages 395-407.
    20. repec:hal:spmain:info:hdl:2441/o45fqtltm960r11iq437ski90 is not listed on IDEAS
    21. Bienvenido Ortega & Antonio Casquero & Jesús Sanjuán, 2016. "Corruption and Convergence in Human Development: Evidence from 69 Countries During 1990–2012," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 127(2), pages 691-719, June.
    22. Pande, Rohini, 2008. "Understanding Political Corruption in Low Income Countries," Handbook of Development Economics, in: T. Paul Schultz & John A. Strauss (ed.), Handbook of Development Economics, edition 1, volume 4, chapter 50, pages 3155-3184, Elsevier.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jjrfmx:v:14:y:2021:i:10:p:492-:d:656791. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.