Corruption, democracy and Asia-Pacific countries
Faculty of Business and Law
School of Business
This paper argues that the relationship between democracy and corruption is non-monotonic. When a country shifts from autocratic rule to highly imperfect democracy (an 'electoral democracy') it is frequently perceived that the level of corruption increases. Conversely, when the democracy level is already relatively high (approaching 'mature democracy') an increase in the level of democracy is typically expected to decrease the level of corruption. To assist with our discussion of these issues, before going on to the empirical part of the paper, we look specifically at the case of South Korea to illustrate how corruption responded to an increasing level of democracy. Using panel data, we find strong empirical support for the non-monotonic relationship. For Asia-Pacific countries, we find that the democracy-corruption relationship becomes negative, at a surprisingly high level of democracy. Moreover we also find that the South Asian region is the most corrupt.