Corporate governance and public corruption

Ana Cusolito

No 5233, Policy Research Working Paper Series from The World Bank

Abstract: Corporate governance in the private sector and corruption are important for economic development and private sector development. This paper investigates how corporate governance in private-sector media companies can affect public corruption. The analytical framework, based on models of corporate governance, identifies two channels through which media ownership concentration affects corruption: an owner effect, which discourages corruption and a competition-for-control effect that enhances it. When the ownership structure of a newspaper has a majority shareholder, the first effect dominates and corruption decreases as ownership becomes more concentrated in the hands of majority shareholders. Without majority shareholders, the competition-for-control effect dominates and corruption increases with the concentration of ownership of the media company. Thus, the paper shows that cases of intermediate media-ownership concentration are the worst at promoting public accountability, while extreme situations, where the ownership is completely concentrated or widely held, can result in similar and lower levels of corruption.

Keywords: Public Sector Corruption&Anticorruption Measures; Corporate Law; Emerging Markets; Debt Markets; Economic Theory&Research (search for similar items in EconPapers)
Date: 2010-03-01
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Persistent link: https://EconPapers.repec.org/RePEc:wbk:wbrwps:5233

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