Corruption does not negatively affect economic growth in democracies

Scholars argue that one of democracy’s benefits is its ability to minimize the detrimental effect of corruption on economic growth. Corruption, scholars say, is the abuse of public office for private gain. A new study by researchers at the University of Missouri-Columbia found that corruption has no significant negative effect on economic growth in democracies, while non-democracies suffer significant economic harm from corruption.

"Although corruption certainly occurs in democracies, the electoral mechanism inhibits politicians from engaging in corrupt acts that damage overall economic performance and thereby jeopardize their political survival," said A. Cooper Drury and Jonathon Krieckhaus, assistant professors of Political Science, who conducted the study with Southern Methodist University political science professor Michael Lusztig.

Drury and his colleagues examined data from more than 100 countries from 1982 to 1997 from the World Bank’s World Development Indicators and the International Country Risk Guide’s assessment of corruption. Corruption was defined as the abuse of public office for private gain. They also looked at whether each country was a democracy, which was classified as having a chief executive and legislatures that were elected as well as having more than one political party.

The results supported Drury’s argument that while democracy exhibited no direct statistical relationship with positive economic growth, it clearly minimized the negative impact that corruption had on economic growth. Drury said that many democracies exhibited significant levels of corruption, but their leaders had to refrain from growth-impairing corruption or else they would be punished at the next election.

"Democracy allows for eviction of bad leaders, while authoritarian elites will prey upon societies unless constrained by democratic institutions," Drury said. "Given that some nations are rife with corruption, promoting democracy within them may enhance not only their general human rights, but also their opportunity for prosperity."

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Links:

A. Cooper Drury
Jonathon Krieckhaus
Department of Political Science 

Michael Lusztig, Southern Methodist University

The World Bank
International Country Risk Guide

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