Abstract
Cross-country studies of corruption have reported a negative relationship between corruption and economic development. Yet the causal direction is unclear. We posit that the relationship between corruption and economic development is innately interdependent or bidirectional because they coevolve within a country. Moreover, corruption and economic development interact with governance, culture, and social development, forming an interdependent system of quintuple helix. We examine these factors with a sample of 157 countries, as well as a subsample of 46 African countries. The results indicate that as countries move away from a factor-driven economy towards an innovation-driven economy, they observe lower levels of perceived corruption. However, the relationship between actual incidence of corruption and economic development is highly sensitive to covariates in governance, culture, and social development, consistent with interdependence among these factors. The factor that consistently explains perceived and actual corruption is a country’s governance systems, measured by institutions or press freedom.
Highlights
Whereas corruption practices exist all over the world, the degree thereof differs for different countries
Corruption and economic development interact with governance, culture, and social development, forming an interdependent system of quintuple helix. We examine these factors with a sample of 157 countries, as well as a subsample of 46 African countries
This paper assesses to what extent corruption is related to a country’s stage of economic development, and how this relationship is sensitive to a country’s governance systems, culture, and social development
Summary
Whereas corruption practices exist all over the world, the degree thereof differs for different countries. Some countries show lower levels of corruption than others; none, shows absence. One inescapable conclusion is that corruption is related to a country’s level of economic development. This paper assesses to what extent corruption is related to a country’s stage of economic development, and how this relationship is sensitive to a country’s governance systems, culture, and social development. We argue that corruption coevolves with a country’s political processes (or effectiveness of governance), culture, social norms, and similar factors. It becomes imperative to approach corruption from a multidimensional perspective
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