Causes of corruption: History, geography and government

This paper adds to the extant literature by using cross-country data for about 100 nations to examine the role of historical factors, geographic influences and the government on corruption. Important innovations include considering a wide set of historical, geographical and government determinants of corruption and examining some of the previously considered determinants at a finer level of detail. Two key questions addressed are: What are the effects of the size and scope of government on the incidence of corruption across countries? How important are historical and geographic influences in affecting corruption? Overall, the answer to the first question is that government does matter in important ways in its impact on corruption. Both the size and scope of government matter. Regarding the second question, the historical inertia of institutions that induce corruption persists, as do rent-seeking opportunities in new countries. Some geographic factors, on the other hand, can mitigate corruption. Policy implications are discussed.