Does democracy reduce corruption?
While democracy is commonly believed to reduce corruption, there are obvious endogeneity problems in measuring the impact of democracy on corruption. This paper addresses the endogeneity of democracy by exploiting the common observation that democracies seldom go to war against each other. We instrument for democracy using a dummy variable reflecting whether a country has been at war with a democracy in the period 1946-2009, while controlling for the extent to which countries have been at war in general. We find that democracy to a significant extent reduces corruption, and the effect is considerably larger than suggested by estimations not taking endogeneity into account. Democracy is hence more important in combating corruption than previous studies would suggest.
|Date of creation:||2011|
|Date of revision:|
|Contact details of provider:|| Postal: P.O. Box 6033, N-5020 Bergen|
Phone: +47 55 57 40 00
Fax: +47 55 57 41 66
Web page: http://www.cmi.no
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Andrei Shleifer & Robert W. Vishny, 1998.
"The Quality of Government,"
Harvard Institute of Economic Research Working Papers
1847, Harvard - Institute of Economic Research.
- Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert Vishny, 1998. "The Quality of Goverment," NBER Working Papers 6727, National Bureau of Economic Research, Inc.
- Rafael LaPorta & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert Vishny, . "The Quality of Government," Working Paper 19452, Harvard University OpenScholar.
- Bin Dong & Benno Torgler, 2010.
"Democracy, Property Rights, Income Equalilty, and Corruption,"
School of Economics and Finance Discussion Papers and Working Papers Series
262, School of Economics and Finance, Queensland University of Technology.
- Bin Dong & Benno Torgler, 2011. "Democracy, Property Rights, Income Equality, and Corruption," Working Papers 2011.08, Fondazione Eni Enrico Mattei.
- Bin Dong & Benno Torgler, 2010. "Democracy, Property Rights, Income Equality, and Corruption," CREMA Working Paper Series 2010-23, Center for Research in Economics, Management and the Arts (CREMA).
- Brunetti, Aymo & Weder, Beatrice, 2003. "A free press is bad news for corruption," Journal of Public Economics, Elsevier, vol. 87(7-8), pages 1801-1824, August.
- Mehmet Bac, 2001.
"Corruption, Connections and Transparency: Does a Better Screen Imply a Better Scene?,"
Springer, vol. 107(1), pages 87-96, April.
- Bac, Mehmet, 2001. "Corruption, Connections and Transparency: Does a Better Screen Imply a Better Scene?," Public Choice, Springer, vol. 107(1-2), pages 87-96, April.
When requesting a correction, please mention this item's handle: RePEc:chm:wpaper:wp2011-4. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Robert Sjursen)
If references are entirely missing, you can add them using this form.