Search results

Analyze how peer effects and social influences affect attitudes and responses to corruption in tax systems, identifying factors that improve tax morale.

Life in Transition Survey (LITS III, 2016) data are analyzed using ordered probit models of corrupt tax officials, Heckman-style selection models of the extent of corruption, probit models of reasons given for not reporting corruption and ordered probit models of the frequency of informal payments to tax officials.

Peer effects and social influences significantly affect perceptions of and responses to corruption. Tax morale is supported in communities where people trust one another, where there is greater respect for the law and where people can achieve greater life satisfaction.

Results are specific to transition countries represented in the data.

Findings can help improve tax morale and stabilize fiscal systems in transition countries.

Enhanced tax morale can be facilitated by building inclusive, respectful and transparent institutions.

This study uses the latest LITS III data with a focus on peer effects and social influences, with improved empirical strategies.

Some scholars argue that corruption hinders economies and investment because it generates extra costs, while others suggest that it can act as a stimulus. Their mixed empirical findings have prompted the analysis of whether investors' attitude towards corruption changes depending on its degree of prevalence.

The authors examined 4,518 public–private partnerships (PPPs) located in 46 developing countries for the period 1997–2017. The data were collected from the World Bank PPP database. The authors investigated the relationship between the amount of investment in PPP projects and the level of corruption using regression with multilevel mixed effects.

Corruption and the amount of investment in PPP projects are inversely related at the low and high end of the spectrum of corruption, but the relationship is positive towards the middle. Further analysis revealed that this was spurred by high investment PPP projects in less developed countries.

The findings allow the authors to reconcile the opposing positions in the literature through a “sand–grease–sand the wheels” effect between the volume of investment and corruption, which can be configured as a reverse S-shape consisting of three stages.

The purpose of this study is to examine how corruption affects the prevalence of product and process innovation by firms.

This study uses firm-level data from the 2012–2016 Business Environment Enterprise Performance Surveys and utilizes a conditional mixed process model to address endogeneity concerns, taking bribery as a measure of corruption.

The study shows that measures of bribery are positively and robustly associated with innovation but mainly for firms reporting many competitors. The results are stronger for firms reporting more obstacles. Both findings support the inference that bribes facilitate innovation by allowing firms to evade regulatory obstacles.

The current research on corruption's effect on innovation restricts the association to be uniform across the sample, but this study shows that the impact depends on the degree of competition faced by a firm. In addition, the data used in this study cover 30 economies in Eastern Europe and Central Asia, and thus contributes to determining the effects of anticorruption practices in emerging countries.

Are there different determinants in the fight against corruption across African countries? Why are some countries more effective at battling corruption than others? To assess these concerns this paper aims to examine the determinants of corruption control throughout the conditional distribution of the fight against corruption using panel data from 46 African countries for the period 2002‐2010.

The panel quantile regression technique enables us to investigate if the relationship between corruption control and the exogenous variables differs throughout the distribution of the fight against corruption.

Results could be summarized in the following. Greater economic prosperity leads to less corruption control and the magnitude of the effect is more important in countries where the fight against corruption is high. Regulation quality seems bimodal, with less positive effects in the tails: among the best and least fighters of corruption. There is support for a less negative consequence of population growth in countries that are already taking the fight against corruption seriously in comparison to those that are lax on the issue. Findings on democracy broadly indicate the democratization process increases the fight against corruption with a greater magnitude at higher quantiles: countries that are already taking the fight seriously. The relevance of voice and accountability in the battle against corruption decreases as corruption control is taken more seriously by the powers that be. Good governance dynamics of political stability, government effectiveness and the rule of law gain more importance in the fight against corruption when existing levels of corruption control are already high.

The results of this study suggest that the determinants of corruption control respond differently across the corruption‐control distribution. This implies some current corruption‐control policies may be reconsidered, especially among the most corrupt and least corrupt African nations. As a policy implication, the fight against corruption should not be postponed; doing so will only reduce the effectiveness of policies in the future. The rewards of institutional reforms are more positive in countries that are already seriously engaged in the corruption fight.

This paper contributes to existing literature on the determinants of corruption by focusing on the distribution of the dependent variable (control of corruption). It is likely that good and poor corruption fighters respond differently to factors that influence the fight against corruption. There are subtle institutional differences between corrupt and clean nations that may affect corruption‐control determinants and government efficacy in the fight against corruption.

The purpose of this paper is to feature a cross-national study that investigates the relationship between national culture and corruption.

The study is based on the so-called “Grid-Group” framework of culture. An analysis based on a sample of 55 countries is employed to estimate the relationship between corruption and cultural, economic and political variables. Cultural dimensions were developed using the World Values Survey (WVS) Wave 4 and 5.

The study finds robust and statistically significant relationships. Cultures with strong hierarchy and fatalism are positively correlated with corruption whereas egalitarian cultures correlate with lower corruption. The regression model employed demonstrates robust statistical significance when all variable categories (culture, economic and political) were employed.

First, as a function of available data, future research should include more countries. Second, as with all previous culture-corruption studies to date, there is no explicit treatment of sub-cultures within a given country in this study: research on culture and corruption in large, multi-ethnic countries such as India, China or the USA where researching regional, sub-cultural differences may be important and insightful.

Strengthening whistle-blower processes open to managers in hierarchical and fatalistic cultures will be an important tactical weapon in fighting corruption. Multinational companies who have progressively phased out expatriate managers in their subsidiaries and replaced them with local managers should invest in training for these managers designed to combat their cultural responses to corrupt behavior. Public policy must focus on institutional reform, breaking down hierarchies, promoting greater efficiency, transparency and accountability. This is a broad and far-reaching target that has to be tackled at all levels of society and across multiple stakeholders. Public policymakers should develop strategies closely with the private sector to develop anti-corruption education and training programs for both public sector and private sector managers.

This is the first time quantitative empirical research has used the Douglas “Grid-Group” framework to estimate the role of culture in explaining corruption. From a policy and strategy perspective, the paper offers specific recommendations to governments and companies.

The purpose of this paper is to investigate whether differences in media exposure regarding corporate corruption appear to influence companies’ anti-corruption disclosures. The authors also examine whether the level of press freedom in firms’ home countries affects disclosure and the impact of media exposure in different ways.

The authors use Transparency International’s 2012 ratings of anti-corruption disclosure by the 105 largest multinational firms in the world, press freedom assessments from the non-governmental organization Reporters Without Borders, and media exposure measures based on a search using the Dow Jones Factiva database. The authors assess relations using regression analysis controlling for other firm-specific factors potentially impacting disclosure choices. Finally, the authors consider the potential effect of other country-level factors.

The results indicate that media exposure, using either an existence or an extensiveness measure, is positively related to differences in sample companies’ anti-corruption disclosures. The authors also find that disclosure is more (less) extensive where home country press freedom is less (more) restricted and that reduced press freedom appears to reduce the impact of media exposure on the disclosure. The authors further document that press freedom levels explain more difference in anti-corruption disclosures than other country-level factors potentially influencing the practice.

Because the investigation is limited to very large international firms for a single year, the degree to which the findings apply to other companies and time periods cannot be assessed. Further, the authors cannot determine how the findings would hold using an alternative disclosure rating scheme. Finally, the authors do not assess whether differences in the source of media exposure impact the findings.

The findings suggest that, to the extent that improved anti-corruption disclosure reflects greater corporate attention to corruption issues, the media may be a powerful player in addressing this social ill. Unfortunately, the results also indicate that media efforts may not be sufficient to bring about change in locations where the freedom of the press is limited. Further, the results suggest that disclosure appears to be a function of exposure to social and political exposures, and the authors therefore question whether it will actually lead to improved corruption performance.

The study is the first to consider the impacts of media exposure and press freedom on corporate social disclosures.

Using Transparency International’s Corruption Perceptions Index (CPI), this paper establishes a statistically significant link between CPI and foreign direct investment (FDI) flows to 54 developing and developed countries. In addition to each country’s CPI, several location and economic characteristics are also postulated to influence FDI. For a group of 22 developing countries, the paper then simulates the impact of an improvement in the CPI score on FDI. This simulation shows that a one point improvement in CPI would generate on average additional FDI of 0.5% of GDP. For instance, the gain in annual FDI would be $7.5 billion for India and $18 billion for China. The paper further simulates the effects of larger FDI on the generation of taxable income and tax revenues in each country using country-specific rates of return on US investment and the highest marginal corporate tax rate in each country. This simulation shows that a three point improvement in CPI would more than double the corporate tax take on average with the biggest beneficiaries such as India, Turkey, Egypt, South Korea, the Philippines and Thailand.

The purpose of this paper is to explore the extent of corruption in India, Fiji and Ethiopia and survey citizen perception of how e‐governance could fight corruption. The main objective is to investigate and explore the potential of e‐governance applications in three countries representing three different regions of Asia, Africa, and Oceania.

A survey was conducted over 918 citizens in India, Ethiopia and Fiji using convenience random sampling. A structured questionnaire was used. The main emphasis of the survey was on citizen perception about corruption and poor service. It further asked respondents on how e‐governance can cut corruption.

Benefits of e‐governance in developing countries are the same as those in developed countries but there are many potential benefits that remain unreaped by developing countries as a consequence of their unlimited use of e‐governance. Based on these assertions, the researchers tried to evaluate and assess the potential of e‐governance initiatives in India, Ethiopia and Fiji. By exploring the role of e‐governance for reducing corruption that has afflicted the entire public sector in these countries, the main finding is that e‐governance is positively related to government, “citizen relationship and corruption reduction”.

This study is highly empirical and does not provide case studies to further extend on the findings.

The implications of the research are that information communication technology (ICT) needs to be effectively integrated in the development agenda of government plans in Ethiopia and Fiji. Government agencies in Ethiopia and Fiji do not seem to be much motivated to build sound government‐citizen partnerships. Citizens can see little of the internal workings of government. However, for India, where there are many e‐governance projects underway, and which is normally considered to be awakening to the challenges of e‐governance and which has to date many success stories relating to e‐governance, it is surprising to see that citizens find various existent formats of corruption and non‐transparent service delivery activities. It is quite evident that bureaucracy is more or less opaque and very little attention has been paid to improving transparency, including through the use of e‐governance processes. Time, cost and red‐tape procedures are major constraints in public service delivery.

The paper explores a problem that is of practical importance using principal‐agent theory, which is very applicable to the public sector context.