An Analysis of the Effect of Culture and Religion on Perceived Corruption in a Global Context

Abstract

This study examines the role of both religion and culture (as measured by the cultural clusters of countries in the GLOBE study of House et al. [2004]) on the levels of perceived corruption. Covering the period from 2000 to 2010, the study uses three different measures of perceived corruption: (1) the World Bank’s Control of Corruption measure, (2) Transparency International’s Corruption Perceptions Index, and (3) Heritage Foundation’s Freedom from Corruption Index. A system of three simultaneous equations are used, with the jointly endogenous variables being perceived corruption, perceived government legitimacy, and perceived government effectiveness.The results show that both cultural and religious differences are incrementally related to perceived corruption, even after controlling for other economic and political factors. Specifically, relative to the Protestant Christian religion, the non-Protestant Christian religion, the Islamic religion, and Other Religion/No Religion are positively associated with higher corruption (or negatively with anti-corruption), but the Buddhist and Hindu religions appear to be not significantly different from the Protestant Christian religion. On the cultural side, compared to the Anglo-Saxon cultural tradition, the other European clusters are incrementally positively associated with higher corruption, but this tendency is offset by more effective political governance, thus leading in the case of the German and Nordic cultures to levels of corruption not statistically different from the Anglo cluster. All the non-European cultural clusters are associated with significantly higher corruption tendencies, but the overall effect is mitigated partially by either greater perceived political legitimacy (Latin-American, Middle-Eastern, Caribbean and Pacific Islander), or greater political effectiveness (Confucian and South-East Asian).