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Causes of corruption in European countries: history, law, and political stability

Author

Listed:
  • Ronald MacDonald
  • Muhammad Tariq Majeed

Abstract

This study asks why corruption is increasing in European countries and what are the most important factors that explain such corruption? Although corruption scandals, speeches and reports indicate that corruption persists in European countries no one has tested the causes of corruption in European countries and this study is, to the best of our knowledge, the first to empirically examine the causes of corruption for European countries. Cross-country data for European countries is used to examine the role of legal influences, historical factors and the effect of political stability on corruption. Five key findings are: (1) the effects of the legal strengths on the incidence of corruption are significant with a negative sign - a one-standard-deviation increase in the legal strengths is associated with a decrease in corruption of 0.26 points, 26% of a standard deviation in the corruption index; (2) political stability is a significant determinant of corruption; (3) the interactive effects of history and law are important in reducing corruption levels; (4) the size of government matters in affecting corruption levels; (5) finally, this study shows that an interdisciplinary approach is the most appropriate way to explain corruption.

Suggested Citation

  • Ronald MacDonald & Muhammad Tariq Majeed, 2011. "Causes of corruption in European countries: history, law, and political stability," Working Papers 2011_24, Business School - Economics, University of Glasgow.
    • Handle: RePEc:gla:glaewp:2011_24
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    Citations

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    Cited by:

    1. Muhammad Tariq MAJEED*, 2016. "MIGRANT REMITTANCES AND CORRUPTION: An Empirical Analysis," Pakistan Journal of Applied Economics, Applied Economics Research Centre, vol. 26(1), pages 15-41.
    2. Germà Bel, 2019. "“Tax me, but don’t drown me in regulations: Understanding differences in corruption across the countries of Europe"," IREA Working Papers 201920, University of Barcelona, Research Institute of Applied Economics, revised Dec 2019.
    3. Germà Bel, 2022. "Beyond government size: Types of government intervention and corruption," Regulation & Governance, John Wiley & Sons, vol. 16(4), pages 1174-1196, October.
    4. Karama, Dalal, 2014. "Ease of Doing Business: Emphasis on Corruption and Rule of Law," MPRA Paper 58662, University Library of Munich, Germany.
    5. Timofeyev, Yuriy, 2015. "Analysis of predictors of organizational losses due to occupational corruption," International Business Review, Elsevier, vol. 24(4), pages 630-641.

    More about this item

    Keywords

    History; Law; Political Instability; Corruption; European Countries;
    All these keywords.

    JEL classification:

    • K0 - Law and Economics - - General
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe
    • P37 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Legal
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • H0 - Public Economics - - General

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