An Institutional Approach to Political Corruption: Statistical Evidence from Asian Countries





Published date: 

June, 2008


Thung-hong Lin
Han Jia


Why is corruption rife in some societies while it is seldom seen in others societies in East Asia? In the context of a neo-institutionalist framework, this study attempts to provide an empirical assessment of the source of corruption by using panel data for 11 East Asian economies over a 10-year period. Corruption is measured by the Corruption Perception Index (CPI) which is developed by Transparency International (TI). Given that changes in the CPI exhibits strong time-dependent properties, the systematic general method of moments (systematic GMM) approach is introduced in the analysis in order to acquire more consistent and unbiased results. We find that in parallel with studies for other regions , authoritarianism and income inequality are first of all the most robust factors leading to political corruption in East Asia. Secondly, the interaction between regime-type and inequality illustrates that, in terms of corruption, democracy more easily suffers from inequality than authoritarianism. Finally, the stock of human capital measured by the enrolled rate of tertiary education tends to enhance the capacity of civil society to guard itself against corruption.