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Corruption: Democracy, Autocracy, and Political Stability

Author

Listed:
  • 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.)

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.

Suggested Citation

  • Kanybek Nur-tegin & Hans J. Czap, 2012. "Corruption: Democracy, Autocracy, and Political Stability," Economic Analysis and Policy, Elsevier, vol. 42(1), pages 51-66, March.
    • Handle: RePEc:eee:ecanpo:v:42:y:2012:i:1:p:51-66
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    Citations

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    Cited by:

    1. Todor S. Lohwasser & Felix Hoch & Franz W. Kellermanns, 2022. "Strength in Stability: A Meta-Analysis of Family Firm Performance Moderated by Institutional Stability and Regime Type," Entrepreneurship Theory and Practice, , vol. 46(1), pages 117-158, January.
    2. Lotfali Agheli, 2017. "Political Stability, Misery Index and Institutional Quality: Case Study of Middle East and North Africa," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 6, pages 30-46.
    3. Hassan O. OZEKHOME, 2022. "Do Regulatory Quality, Government Effectiveness and Rule of Law Matter to Foreign Direct Investment in Nigeria?," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(1), pages 160-175, April.
    4. Bashir Ahmad & Maria Ciupac-Ulici & Daniela-Georgeta Beju, 2021. "Economic and Non-Economic Variables Affecting Fraud in European Countries," Risks, MDPI, vol. 9(6), pages 1-17, June.
    5. Strand, Jon, 2013. "Political economy aspects of fuel subsidies : a conceptual framework," Policy Research Working Paper Series 6392, The World Bank.
    6. Kanybek Nur-tegin, 2014. "Entrenched Autocracy or New Democracy: Which Is Better for Business?," Kyklos, Wiley Blackwell, vol. 67(3), pages 398-419, August.
    7. Mohammad Reza Farzanegan & Stefan Witthuhn, 2014. "Demographic Transition and Political Stability: Does Corruption Matter?," CESifo Working Paper Series 5133, CESifo.
    8. Ratbek Dzhumashev, 2014. "The Two-Way Relationship Between Government Spending And Corruption And Its Effects On Economic Growth," Contemporary Economic Policy, Western Economic Association International, vol. 32(2), pages 403-419, April.
    9. Yang, Suyeon & Park, Sangchan, 2020. "The effects of renewable energy financial incentive policy and democratic governance on renewable energy aid effectiveness," Energy Policy, Elsevier, vol. 145(C).
    10. Sulemana, Iddisah & Kpienbaareh, Daniel, 2018. "An empirical examination of the relationship between income inequality and corruption in Africa," Economic Analysis and Policy, Elsevier, vol. 60(C), pages 27-42.
    11. A. Enisan Akinlo, 2024. "Corruption and Misery Index in Nigeria: Is There a Link?," Journal of Interdisciplinary Economics, , vol. 36(1), pages 26-40, January.
    12. Policardo, Laura & Carrera, Edgar J. Sánchez, 2018. "Corruption causes inequality, or is it the other way around? An empirical investigation for a panel of countries," Economic Analysis and Policy, Elsevier, vol. 59(C), pages 92-102.
    13. Sajad Rahimian, 2021. "Corruption Determinants, Geography, and Model Uncertainty," Papers 2105.12878, arXiv.org.
    14. Giuseppe Liddo & Andrea Morone, 2023. "Local income inequality, rent-seeking detection, and equalization: a laboratory experiment," Public Choice, Springer, vol. 196(3), pages 257-275, September.
    15. Ivica Petrikova & Melita Lazell, 2022. "“Securitized” UK aid projects in Africa: Evidence from Kenya, Nigeria and South Sudan," Development Policy Review, Overseas Development Institute, vol. 40(1), January.

    More about this item

    Keywords

    corruption; democracy; autocracy; dictatorship; political stability;
    All these keywords.

    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State

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