Is Political Environment a Breeding Ground for Public Sector Corruption? Evidence from a Cross-Country Analysis
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University of Sri Jayewardenepura, Nugegoda
Abstract
This study employs the instrumental variable two-stage least squares regression approach for the data for 121 countries to explore the impact of a country’s political environment on its level of corruption. The study provides strong evidence that a higher degree of rule of law, press freedom, readiness and capacity to handle e-governance practices, and urbanization are associated with a lower level of public sector corruption across all 121 countries. The colonial dummies and having a presidential government are found to be valid instruments for rule of law in addressing the issue of endogeniety embedded in it. Further, to a certain degree, landlocked countries are relatively more corrupt than coastal countries. Finally, policy implications are discussed based on the findings of the study.
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Kumara, A.S. (2014). Is Political Environment a Breeding Ground for Public Sector Corruption? Evidence from a Cross-Country Analysis. Sri Lankan Journal of Business Economics, 5, 69-90.
