Determinants of corruption: a panel data analysis of Visegrad countries

Abstract

Research background: Corruption is a phenomenon that has no borders, thus hindering the proper functioning of the social, economic, and legal systems of a given state. As the rankings assessing the level of corruption in various countries show, transition economies are more vulnerable to corruption than countries that have not undergone changes in the political and economic order. The Visegrad group is an example of such countries. Despite their efforts, these countries' governments have yet to match the evaluation of corruption indices for developed European countries.

Purpose of the article: This study analyses the determinants of corruption in Visegrad countries to identify which determinants are the most impactful and thus should be the focus of Visegrad countries' governments when creating anti-corruption policies.

Methods: Data for the period 1996-2019 from the databases of the World Bank, Transparency International. and the European Central Bank were used for panel data analysis. The study uses a comprehensive set of economic, socio-cultural, and political determinants that can influence corruption. The purpose of this large set of variables is to prevent possible distortion owing to omitted variables.

Findings & value added: The results of the analysis of panel data show the main determinants of corruption in Visegrad countries are economic, political, and socio-cultural (phase of economic development, openness of the economy, size of the public sector, degree of urbanization, and women's share in the labour force). A significant effect was also demonstrated in the case of regulatory quality and public sector wages. The findings can serve as a valuable resource for policymakers to develop government policies in individual countries and to implement effective anti-corruption tools.