Does ICT diffusion matter for corruption? An Economic Development Perspective

Abstract

This study assess the impact of ICT diffusion on corruption by using instrumental variables method on a panel data set of 175 countries over the period 1996–2014. We check for the stability of the ICT-corruption nexus for different levels of economic development. Our results show that ICT diffusion clearly acts as an effective tool to control corruption. The study also reports that as the countries develop economically they improve their corruption level. Moreover, as per the per capita GDP, estimation outcomes suggest that both trade openness and better institutions are associated with lower corruption levels. However, results show robust support to suggest that as the general price level increases, bribery increases. This effect is more pronounced for the developing countries than for developed ones, which may witness higher inflation rates and therefore a higher cost of living. Drawn on our results, our study addresses important insights and policy implications mainly for developing countries.