Abstract
Several leading indicators of corruption point to a serious problem in India on the whole. Yet what can explain the substantial variance of corruption levels perceived and experienced by citizens across various Indian states? Surprisingly little research in the field has addressed this important question. This article elucidates several relevant and testable hypotheses from the growing literature on the determinants of corruption, and applies them to the case of the Indian states. The estimates of the empirical models show that the level of development—measured both in economic and education terms—and the level of fiscal decentralization are significant and negatively related with levels of corruption. Factors such as income inequality, religious fractionalization, media exposure are statistically insignificant.
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