Political Polarization as a Constraint on Government: Evidence from Corruption

Abstract

Efforts to explain corruption have increased dramatically over the last few years. The interest stems from the increasing weight economists assign to corruption when explaining economic growth and from the availability of data that measure it. Much of the effort centers on how political institutions influence perceptions of corruption. We move this debate in a new and fertile direction by addressing a previously ignored dimension: ideological polarization. Specifically, we contend that perceptions of corruption are determined not only by specific institutional features of the political system - elements of voting systems, ballot structures, or the existence of checks and balances - but by who sits at the controls. We employ pooled cross-sectional data for a broad variety of countries to test our theoretical argument. Contrary to recent findings by both economists and political scientists, we show that ideological polarization is a robust predictor of corruption.

Keywords: Corruption, political institutions, political polarization

JEL Classification: D72, K4, O57, 010