Corruption: Democracy, Autocracy, and Political Stability

Kanybek Nur-tegin () and Hans J. Czap ()
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Kanybek Nur-tegin: Wilkes Honors College, Florida Atlantic University, 5353 Parkside Drive, Jupiter, FL 33410, U.S.A.
Hans J. Czap: University of Michigan, Dearborn, FCS 121A, 19000 Hubbard Drive, Dearborn, MI 48126, U.S.A.

Economic Analysis and Policy, 2012, vol. 42, issue 1, 51-66

Abstract: The recent empirical literature on corruption has identified a long list of variables that correlate significantly with corruption but only five were distinguished by Leamer’s Extreme Bounds Analysis as robust to various samples, measures of corruption, and regression specifications. Among these five factors that were found to reduce corruption are decades-long tradition of democracy and political stability. In today’s world, however, there are many countries that combine one of these two robust determinants of corruption with the opposite of the other: politically stable autocracies or newly formed and unstable democracies. The central question raised in this paper is: Is it worth, in terms of corruption, for a country to trade stability with autocratic rule for political freedoms but with transitional instability? We find that the answer to this question is in the affirmative - the level of corruption is indeed lower in unstable democracies than in stable dictatorships. Our results are robust to various measures of corruption, alternative regressor indices, and regression specifications.

Keywords: corruption; democracy; autocracy; dictatorship; political stability (search for similar items in EconPapers)
JEL-codes: D02 D73 P16 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (16)

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