Article

 

The pillars of corruption control worldwide: Differences between rich and poor countries (p.105-126)

by

Kostas Rontos, University of the Aegean

Ioannis Vavouras, Panteion University of Social and Political Sciences, and Hellenic Open University

Keywords : Corruption, Government effectiveness, Economic development, Political system.

JEL classification : D72, D73, H11, O11, O57

Abstract

Corruption is a multidimensional phenomenon associated with several causes and effects. It critically undermines the economic and social development of nations. The scope of this paper is to examine the basic pillars of corruption control worldwide. More specifically, our analysis focuses on the study of the effects that the level of economic development, as we approach it by the gross national income per capita in purchasing power parities or current international dollars, the political system, as we approach it by the “freedom rating”, an index comprising both political rights and civil liberties, and the level of government effectiveness, as we approach it by the “government effectiveness indicator” and the non-income level of human development, as we approach it by the non-income “human development index”, exert on the perceived level of corruption. By investigating 178 countries all over the world using 2010 data we find that government effectiveness is the most critical factor determining the scale of corruption worldwide. Therefore, the single most important means to reduce corruption is to improve government effectiveness. Moreover, our analysis also reveals that the level of economic development is an important factor negatively correlated with the level of corruption only in relatively high economic development countries, while in the case of relatively low economic development countries the political system seems to be another important factor determining the level of corruption.