Work detail

Measuring corruption in developed countries

Author: Mgr. Anna Bajzíková
Year: 2012 - winter
Leaders: PhDr. Jaromír Baxa Ph.D.
Work type: Finance, Financial Markets and Banking
Language: English
Pages: 97
Awards and prizes:
Abstract: The complex issue of corruption has attracted much attention over the last 20 years. The
problem was analyzed mostly in the context of developing and transition countries, though
not only the recent financial crisis showed the severity of corruption also in the world’s
most developed countries. This thesis analyzes twelve currently available corruption
assessments for a cross section of 39 developed countries in the period 2007-2010. The
thesis categorizes these assessments into three basic generations and characterizes the
weaknesses and limitations of particular methods. The analysis is based on determination
of relationship between individual corruption measures and recognizes specific aspects of
corruption actually measured by particular indices. With the exception of strictly opinion
poll-based corruption indices, the first and the second generation of corruption indices
correlate well for a set of developed countries. This indicates that the sector specific
indices, e.g. expenditure corruption assessment, are in analyzed countries closely related to
the overall political corruption levels. An applied hierarchical cluster analysis gives better
picture of otherwise inconsistent developed countries corruption rankings and divides
countries into ten homogeneous groups. However, the analysis failed to rebut the criticism
that there is no clear order of countries that are considered the least corrupt. Based on our
analysis, 13 out of a total 39 countries do not display any fundamental differences in the
extent of overall political corruption. The analysis of all available corruption measures also
aims to find the most suitable corruption assessment for further study of impact of
corruption on some economic indicators. Based on empirical analysis of available
corruption measures and conclusions from literature, the political risk assessments
provided by commercial business providers are sufficient for these purposes and enable us
to derive a unique assessment of political corruption risk. This assessment derived from
indices of corruption, law and order, and bureaucratic quality can serve as a proxy for the
level of political corruption in developed countries.
Downloadable: Diploma Thesis of Bajzikova




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