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Accountability and Corruption: Political Institutions Matter
37 Pages
Posted: 20 Apr 2016
Daniel Lederman
World Bank - Latin America and Caribbean Region
Norman Loayza
World Bank - Research Department
Rodrigo R. Soares
Columbia University - School of International & Public Affairs (SIPA); Getulio Vargas Foundation (FGV) - Sao Paulo School of Economics; IZA Institute of Labor Economics
There are 2 versions of this paper
Date Written: November 2001
Abstract
The results of a cross-country empirical analysis suggest that political institutions are extremely important in determining the prevalence of corruption: democracy, parliamentary systems, political stability, and freedom of the press are all associated with lower corruption.
Using a cross-country panel, Lederman, Loayza, and Soares examine the determinants of corruption, paying particular attention to political institutions that increase political accountability. Previous empirical studies have not analyzed the role of political institutions, even though both the political science and the theoretical economics literature have indicated their importance in determining corruption.
The main theoretical hypothesis guiding the authorsi empirical investigation is that political institutions affect corruption through two channels: political accountability and the structure of the provision of public goods.
The results suggest that political institutions are extremely important in determining the prevalence of corruption: democracy, parliamentary systems, political stability, and freedom of the press are all associated with lower corruption. In addition, the authors show that common findings of the earlier empirical literature on the determinants of corruption related to openness and legal traditionódo not hold once political variables are taken into account.
This paper - a product of the Office of the Chief Economist, Latin America and the Caribbean Region - is part of a larger effort to conduct research on pressing policy issues in the region. The authors may be contacted at dlederman@worldbank.org or nloayza@worldbank.org.
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34 References
  1. GALLUP Corruption Gallup International Frequency of "cases of corruption" among public officials. Based on survey of citizens. Detailed in K aufman et al (1999). GCS1 Corruption Global Competitiveness Survey Irregular, additional payments connected with import and export permits, business licenses, exchange controls, tax assessments, police protection or loan applications. Based on survey of enterprises
    DRI Corruption Standard and Poor's DRI/McGraw-Hill Corruption among public officials, effectiveness of anticorruption initiatives
    Posted: 1997
  2. Christian Ahlin
    Corruption: Political determinants and macroeconomic effects
    Posted: 2000
  3. Bai, Shang-Jin Chong-En, Wei
    Quality of bureaucracy and openeconomy macro policies
    Posted: 2000
    Crossref
  4. John Bailey, Arturo Valenzuela
    The shape of the future
    Journal of Democracy, volume 8, p. 43 - 57
    Posted: 1997-10
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