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Corruption, Democracy, Economic Freedom, and State Strength

A Cross-national Analysis

Boston College, USA, shenc{at}bc.edu

John B. Williamson

Boston College, USA, jbw{at}bc.edu

While it is widely acknowledged that corruption has negative effects on economic growth, investment, and social welfare, the structural causes of corruption have received very little quantitative country-level cross-national analysis. Our structural equation-based analysis of data for 91 nations includes several important determinants of cross-national variation in perceived levels of corruption. Our analyses yield four major findings: 1) democracy, as measured by indicators of political rights, civil liberties, and press freedom, has a positive effect on perceived level of corruption control; 2) state strength has a positive direct effect; 3) openness of the economy, as measured by economic freedom, has a positive effect; and 4) ethnolinguistic fractionalization has both direct and indirect negative effects.

Key Words: comparative • corruption • cross-national • democracy

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