Accountability and Corruption: Political Institutions Matter
37 Pages Posted: 20 Apr 2016See all articles by Daniel Lederman
World Bank - Latin America and Caribbean Region
World Bank - Research Department
Columbia University - School of International & Public Affairs (SIPA); Getulio Vargas Foundation (FGV) - Sao Paulo School of Economics; IZA Institute of Labor Economics
Accountability and Corruption: Political Institutions MatterWorld Bank Policy Research Working Paper No. 2708 Number of pages: 37 Posted: 20 Apr 2016 You are currently viewing this paper Downloads 2,766
Date Written: November 2001
The results of a cross-country empirical analysis suggest that political institutions are extremely important in determining the prevalence of corruption: democracy, parliamentary systems, political stability, and freedom of the press are all associated with lower corruption.
Using a cross-country panel, Lederman, Loayza, and Soares examine the determinants of corruption, paying particular attention to political institutions that increase political accountability. Previous empirical studies have not analyzed the role of political institutions, even though both the political science and the theoretical economics literature have indicated their importance in determining corruption.
The main theoretical hypothesis guiding the authorsi empirical investigation is that political institutions affect corruption through two channels: political accountability and the structure of the provision of public goods.
The results suggest that political institutions are extremely important in determining the prevalence of corruption: democracy, parliamentary systems, political stability, and freedom of the press are all associated with lower corruption. In addition, the authors show that common findings of the earlier empirical literature on the determinants of corruption related to openness and legal traditionódo not hold once political variables are taken into account.
This paper - a product of the Office of the Chief Economist, Latin America and the Caribbean Region - is part of a larger effort to conduct research on pressing policy issues in the region. The authors may be contacted at [email protected] or [email protected]
Suggested Citation: Suggested CitationLederman, Daniel and Loayza, Norman and Soares, Rodrigo R., Accountability and Corruption: Political Institutions Matter (November 2001). World Bank Policy Research Working Paper No. 2708. Available at SSRN: [ssrn.com]
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