Advanced

Corruption and Democracy - An empirical investigation using panel data

Stefansdotter, Amanda LU (2011) NEKM09 20111
Department of Economics
Abstract
The assumption of positive effects of democratic reform has come to underlie much of the West’s policy recommendations for developing countries. However, following democratization, many countries have experienced upsurges in corruption levels, undermining the democratic process. This thesis explores the possibility of a nonlinear link between democracy and corruption. If democratization and reductions in corruption levels are in fact incompatible at early stages of political liberalization, policy needs to be adjusted to take this into consideration. Based on cross-section and panel data, regression analysis is performed with perceived levels of corruption as the dependent variable. For robustness testing, separate measures of democracy... (More)
The assumption of positive effects of democratic reform has come to underlie much of the West’s policy recommendations for developing countries. However, following democratization, many countries have experienced upsurges in corruption levels, undermining the democratic process. This thesis explores the possibility of a nonlinear link between democracy and corruption. If democratization and reductions in corruption levels are in fact incompatible at early stages of political liberalization, policy needs to be adjusted to take this into consideration. Based on cross-section and panel data, regression analysis is performed with perceived levels of corruption as the dependent variable. For robustness testing, separate measures of democracy and corruption are used. The results mostly support the theory of a nonlinear relationship between democracy and corruption. The findings also indicate that higher levels of income and economic freedom correspond to lower perceived levels of corruption, while ethno-linguistic fractionalization and unemployment increases levels of perceived corruption. (Less)
Please use this url to cite or link to this publication:
author
Stefansdotter, Amanda LU
supervisor
organization
course
NEKM09 20111
year
type
H1 - Master's Degree (One Year)
subject
keywords
Economics Corruption Democracy Development Regression analysis
language
English
id
1976761
date added to LUP
2011-06-17 12:21:17
date last changed
2011-06-17 12:21:17
@misc{1976761,
  abstract     = {The assumption of positive effects of democratic reform has come to underlie much of the West’s policy recommendations for developing countries. However, following democratization, many countries have experienced upsurges in corruption levels, undermining the democratic process. This thesis explores the possibility of a nonlinear link between democracy and corruption. If democratization and reductions in corruption levels are in fact incompatible at early stages of political liberalization, policy needs to be adjusted to take this into consideration. Based on cross-section and panel data, regression analysis is performed with perceived levels of corruption as the dependent variable. For robustness testing, separate measures of democracy and corruption are used. The results mostly support the theory of a nonlinear relationship between democracy and corruption. The findings also indicate that higher levels of income and economic freedom correspond to lower perceived levels of corruption, while ethno-linguistic fractionalization and unemployment increases levels of perceived corruption.},
  author       = {Stefansdotter, Amanda},
  keyword      = {Economics Corruption Democracy Development Regression analysis},
  language     = {eng},
  note         = {Student Paper},
  title        = {Corruption and Democracy - An empirical investigation using panel data},
  year         = {2011},
}