Political Corruption and Institutional Stability

Abstract

This article is the first to statistically examine the reciprocal relationship between formal political institutions and political corruption. We argue that political corruption is an informal institution that allows nondemocratic leaders to build political support, act as a substitute for liberalizing concessions in the formal institutions of the state, and thereby extends the longevity of non-democratic regimes. Yet, whereas high corruption level will prevail in nondemocratic regimes, we expect the electoral constituency in democratic regimes to have the formal power to curb political corruption. We demonstrate that these expectations hold by estimating a dynamic multinomial regression model on data for 133 countries for the 1985-2008 period. Our model shows that high-corruption autocracies and hybrid regimes are more stable than their low-corruption counterparts, but that low-corruption democracies are more stable than high-corruption ones. For autocratic and hybrid regimes, the stability is due both to corruption making the formal institutions more resistant to democratization and that the formal institutions prevent reductions in corruption. Consistent democracies, on the other hand, are able to reduce corruption and become more stable as a result. © 2014 Springer Science+Business Media New York.