Human Freedoms and Public Corruption around the World: Demonstration of a Curvilinear Relationship
McCuddy, Michael K., Forum on Public Policy: A Journal of the Oxford Round Table
Seldom has a week passed in the last few years without a report appearing in the broadcast and/or print media regarding some actual or alleged violation of various freedoms, or some actual or alleged act of corruption on the part of business people and/or government officials--sometimes with these two entities acting in concert. Such news reports reflect two enduring human concerns around the globe. One concern involves the various freedoms enjoyed (or not enjoyed) by citizens of different nations. The other concern reflects the presence or absence of corruption among public officials and politicians of those same countries. This paper focuses on these two concerns by exploring the relationship between human freedoms and corruption in national public life around the globe.
Section 2 of the paper examines the literature regarding then nature of corruption in public life. Section 3 explores various human freedoms--economic, political/civil, cultural, and religious--and connects them to the incidence of public corruption. In concluding this section, an argument is made on behalf of a curvilinear relationship, of cubic form, between human freedoms and corruption. Section 4 provides an extensive description of the databases; the dependent variable measure (i.e., public corruption); the several component measures (i.e., economic, political/civil, cultural, and religious freedoms) of the independent variable (i.e., human freedoms); the data collection time frames; and the factor analysis derivation of the aggregate independent variable. Section 5 presents the results of a polynomial regression analysis, with corruption as the dependent variable and human freedoms as the independent variable. Section 6 discusses the implications of the supported hypotheses and addresses strength and limitations of the study, as well as directions for future research.
2. Corruption in public life
Corruption is widely viewed as the abuse of public power (or public office) for private gain (World Bank, 1997) or the abuse of public trust for private gain (Todaro and Smith, 2003). Corruption has also been described as a violation of established rules and ways of doing things with the objective of obtaining private gain or profit (Sen, 1999). Transparency International (TI) defines corruption as "the abuse of public office for private gain" (TI CPI 2006, p. 10).
"Public office is abused for private gain when an official accepts, solicits, or extorts a bribe. It is also abused when private agents actively offer bribes to circumvent public policies and processes for competitive advantage and profit. Public office can also be abused for private benefit even if no bribery occurs, through patronage and nepotism, the theft of state assets, or the diversion of state revenues" (World Bank, 1997, p. 8).
What causes people to abuse public office for private gain? Although different authors focus on different causes of corruption, there is remarkable convergence among the various sources. For instance, Akcay (2006, p. 29) argues that "[c]orruption's roots are grounded in a country's social and cultural history, political and economic development, bureaucratic traditions and policies." Jong-Sung and Khagram (2005) organize the various causes of corruption into three categories: economic, political, and cultural/historical factors. Tanzi (1998) identifies direct and indirect factors that promote corruption. Direct factors include taxation, spending decisions, regulations and authorizations, providing goods and services at below market prices, and financing political parties. Indirect factors include quality of the bureaucracy; transparency of rules, laws, and processes; level of public sector wages; penalty systems; and institutional controls. How these different causes independently or jointly influence corruption have been explored in a variety of cross-national statistical studies (see for example: Ades and Di Tella, 1999; Blake and Martin, 2006; Husted, 1999; McCuddy, 2004; McCuddy and Dale, 2003; Montinola and Jackman, 2002; Paldam, 2001; Treisman, 2000; Triandis et al. …