Corruption and Anti-Market Beliefs: Evidence from the Gallup World Poll

Abstract

Does experience of corruption and cronyism have an effect on popular attitudes towards markets and capitalists? Using the data from the Gallup World Poll, we find broad support for the proposition that corruption and cronyism – and therefore also the experience of corrupt, “unpleasant,” business people – leads to an aversion against markets in countries where such practices are abundant. Lower levels of control of corruption, as measured by the Worldwide Governance Indicators, are associated with weaker perceptions of meritocracy and a lower support for the belief that entrepreneurs are good role models for the youth. Furthermore, corruption also significantly reduces trust in potential business partners. Paradoxically, we also document a negative association between WGI’s measure of control of corruption and willingness to start own business. This can be plausibly explained by the fact that corruption represents a barrier to the growth of businesses, and as such reduces the opportunities of individuals to find employment in the private sector.

Keywords: Beliefs about markets, corruption, cronyism

JEL Classification: D02, P52