Causes of Corruption

Econ Gov (2008) 9:245–263 DOI 10.1007/s10101-007-0033-4 O R I G I NA L PA P E R

Causes of corruption: a survey of cross-country analyses and extended results
Lorenzo Pellegrini · Reyer Gerlagh

Received: 30 September 2005 / Accepted: 20 October 2006 / Published online: 23 February 2007 © Springer-Verlag 2007

Abstract We survey and assess the empirical literature on the sources of corruption Thanks to the improved availability of data, we are able to produce an improved cross-country econometric model to test well-established and more recent hypotheses jointly. We do not find that the common law system, or a past as a British colony predicts corruption. Our results support cultural theories on the causes of corruption, and suggest that a medium-long exposure to uninterrupted democracy is associated with lower corruption levels, while political instability tends to raise corruption. Our results also suggest that the diffusion of newspapers helps to lower corruption levels. Keywords Corruption · Ethnolinguistic fractionalization · Democracy · Political instability JEL classification D72 · H11 · H50 · K42 · O17

L. Pellegrini (B ) Institute of Social Studies (ISS), Kortenaerkade 12, 2518 AX The Hague, The Netherlands e-mail: [e-mail] L. Pellegrini · R. Gerlagh Institute for Environmental Studies (IVM), Vrije Universiteit Amsterdam, Amsterdam, The Netherlands R. Gerlagh University of Manchester, School of Social Sciences, Economics, Manchester, UK

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L. Pellegrini, R. Gerlagh

1 Introduction Corruption is a widespread phenomenon affecting all societies to different degrees, at different times. On the one hand, as corruption scandals have repeatedly shown, bribes are common in all countries notwithstanding differences in income levels and law systems, as they are common in democracies and in dictatorships. Recent scandals over corruption have shown that also supposedly free-from-corruption societies are affected. The ELF scandal demonstrated

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