THE CAUSES OF CORRUPTION: A CROSS-NATIONAL STUDY Why is corruption—defined here as the misuse of public office for private gain—perceived to be more widespread in some countries

Why is corruption—defined here as the misuse of public office for private gain—perceived to be more widespread in some countries than others? Different theories associate cross-national variation in the extent of corruption with particular historical and cultural traditions, levels of economic development, political institutions, and government policies. This paper analyzes which of various plausible determinants are significantly related to an index of “perceived corruption” compiled from business risk surveys for the mid-1990s. Using 2SLS to reduce problems of endogeneity and a variation of Leamer’s “extreme bounds analysis” to test for robustness, it finds three factors robustly significant. Countries that were more economically developed and those which are former British colonies were rated “less corrupt”. Those which have a federal structure were “more corrupt”.