Understanding corruption through a cross-national comparison
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In recent empirical research, there has been a quest to understand why countries have been inflicted by corruption to different extents. Informed by the cultural theory, the modernization theory, and the public choice theory, these studies have put a variety of hypotheses to the test in cross-sectional regression analyses using subjective measures of corruption. However, with regard to the relationship between the prevalence of corruption and the level of democratic development as well as the extent of government intervention in the economy, the empirical results have largely failed to confirm the theoretical expectations. In this dissertation, I argue that a combination of the public choice theory and the modernization theory posits a curvilinear relationship between corruption and democracy, which is subsequently confirmed in the regression analysis of over 140 countries using three different indicators of democratic development. This finding contradicts the conventional wisdom that democracy may serve as a panacea for all of Third World's problems and cautions that newly established democracies should expect a surge in the incidence of corruption, which will only abate as these democracies mature. Furthermore, contrary to previous empirical studies but confirming the assertion of the public choice theory, I find that lesser extent of government intervention in the economy is likely to reduce the incidence of corruption. I argue that the different findings are due to an erroneous measure of the extent of government intervention in the economy in previous studies.