Accountability and Corruption: Political Institutions Matter

This study uses a cross-country panel to examine the determinants of corruption, paying particular attention to political institutions that increase accountability. Even though the theoretical literature has stressed the importance of political institutions in determining corruption, the empirical literature is relatively scarce. Our results confirm the role of political institutions in determining the prevalence of corruption. Democracies, parliamentary systems, political stability, and freedom of press are all associated with lower corruption. Additionally, common results of the previous empirical literature, related to openness and legal tradition, do not hold once political variables are taken into account. * We are grateful to Alberto Alesina, Phil Keefer, Guillermo Perry, Luis Servén, Randall Calvert, and an anonymous referee for helpful comments. The views expressed herein are those of the authors and do not necessarily represent the view of the institutions to which they are affiliated.