Political institutions and the control of corruption: a cross-country evidence

Siew Pyng Christine Chong, Chwee Ming Tee and Seow Voon Cheng

Journal of Financial Crime, 2020, vol. 28, issue 1, 26-48

Abstract: Purpose - The purpose of this paper is to examine the significant association between political institutions and the control of corruption. Design/methodology/approach - This study uses ordinary least squares model to examine the following: quality of political institutions; the association between the strength of democratic institutions and control of corruption; the association between government effectiveness and control of corruption; and the association between legal institutions and control of corruption. Findings - The result shows that there is positive association between democratic institutions, government bureaucracy and rule of law with the control of corruption. From the political perspective, stronger democratic institutions are found to be associated with higher ability to control corruption in a country. When viewed from country’s economic and social well-being perspective, highly effective government bureaucracy is positively associated with ability to control corruption. Finally, rule of law is also associated with the control of corruption. Originality/value - This study points toward clear priorities for reform as stronger democratic institutions, efficient government bureaucracy and adherence to the rule of law improve the control of corruption. The results show that stronger democratic institutions, highly effective government bureaucracy and rule of law are associated with higher control of corruption. This supports the theory that quality political institutions reduce corruption in the long-run. In addition, this study shows that press freedom, regulatory quality and political stability further enhance the capacity of such institutions to combat corruption. Conversely, crony capitalism systems undermine this positive association.

Keywords: Democratic institutions; Government bureaucracy; Rule of law; Corruption; Crony capitalism; Political institutions (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eme:jfcpps:jfc-05-2020-0094

DOI: 10.1108/JFC-05-2020-0094

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