Media freedom and democracy in the fight against corruption

- Democratization and media freedom are both said to reduce political corruption.
- We study theoretically and empirically their interplay in reducing corruption.
- The theoretical model predicts complementarity of democracy and media freedom.
- Differences-in-differences estimates support our theoretical predictions.

Democratization and media freedom have been suggested as useful tools in the fight against political corruption, but so far their interplay in this fight has received scant attention. We present a game theoretic model which allows for varying quality of media freedom and democratic institutions. The model predicts, among others, that democratization and media freedom are complements in the fight against political corruption. We test our theoretical predictions using differences-in-differences estimations and panel data covering 129 countries from 1980 to 2007. We find evidence of causal effects of democratization and media freedom on corruption, and that the two are complements. Our main results hold after controlling for income, country fixed effects, and continent-specific time-varying shocks.