Changes in corruption perception : what comes first?

Abstract

Corruption, generally defined as the misuse of entrusted power for private benefit, is quite complex phenomenon and an intricate issue. Corruption has destructive impact on many aspects of the economy; that is why it can be increasingly seen on national and international agendas of conference meetings and seminars. Nevertheless, no consensus on the exact determinants of corruption has been reached. Most previous studies choose an index as a measure of corruption and estimate the parameters of the models using multiple regression. In this paper, we deviate from this norm and follow Kaufmann et al’s suggested method of cross-country and over-time comparisons. Subsequently, in terms of change in the corruption-perception index, we divide countries into 3 groups – (1) countries which experience significant improvement, (2) countries which experience significant deterioration, (3) countries, which did not experienced any significant change. Afterwards, to explain the change, we eliminate structural causes which cannot be changed and proceed with factors that can be influenced by human agency. Using ordered probit, a statistical model for discrete random variables, we try to point out the factors the change of which can lead to a significant change in corruption-perception index. To the best of our knowledge, for the first time, corruption is modeled in such a context. As a result, we find that the improvement of political rights, civil liberties, the change of government and the increase of female labor participation rate are significant to change the level to corruption.