Assessing the Political and Socio-Economic Impact of Corruption among Nations

Assessing the Political and Socio-Economic Impact of Corruption among Nations

Richard N. LaRocca (Department of Business Administration, Wagner College, Staten Island, NY, USA)
Copyright: © 2014 |Pages: 23
DOI: 10.4018/ijissc.2014100102

Abstract

This research combined three distinctly unique and separate measures of corruption into one corruption factor, so as to yield a robust measurement approach to further understand the political and socioeconomic variables of corruption. The findings show that a strong significant variable in measuring corruption is the personal marginal-tax rate, especially in hierarchical based nations. The higher the tax rate is, the less corrupt the nation is. The authors found that hierarchical nations' public-sector employees place more emphasis on sociological determinants and tax rate contributions as factors contributing toward corruption.
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2. Literature Review

Corruption has been defined in many ways over the years and by numerous researchers. The World Bank (2011b) defined corruption as “the abuse of entrusted power for private gain… (which therefore) distorts markets, stifles economic growth, debases democracy and undermines the rule of law” (para.2), resulting in keeping foreign investors at bay, limiting sustainable economic and social development, and preventing job creation (World Bank Development Research Group, 2011b).

Tanzi (1995) claimed that a more neutral definition of corruption is “the intentional noncompliance with arm’s length relationships aimed at deriving some advantage from this behavior for oneself or for the related individuals” (p. 161).

Svensson (2005) stated “public corruption is the misuse of public office for private gain. Misuse … typically involves applying a legal standard. Corruption defined this way would capture, for example, the sale of government property by government officials, kickbacks in public procurement, bribery and embezzlement of government funds” (p. 20).

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