19 International determinants of national corruption levels Wayne Sandholtz and Mark Gray1
Anti-corruption norms and ideas have gained increasing international prominence over the past decade. The efforts of transnational networks (such as Transparency International) and international organisations (such as the IMF, OECD, UN and World Bank) have substantially strengthened and diffused international anti-corruption values and norms. Do these developments on the international plane have measurable effects on the level of corruption within countries? We suggest that international factors affect a country’s level of corruption through two principal channels. One channel is economic incentives, altering for various actors the costs and benefits of engaging in corrupt acts. The second is social integration and the transmission of values and norms; norms in international society delegitimate and stigmatise corruption. On the economic side, cross-national trade and investment ties can constrain corruption by increasing its costs. Numerous previous studies have found that the more open a country is to international trade, the lower its corruption level tends to be. Corrupt practices can perpetuate themselves more easily in closed economies, cut off from competitive pressures. Our empirical analysis included a set of variables measuring economic integration: trade openness (total trade/GDP), gross foreign direct investment per capita, international air freight and air passengers per capita, and international telecommunications traffic per capita. In addition, the interactions associated with trade and cross-border investment may also be mechanisms for the communication of ideas, values, and norms. Other loci for the transmission of international norms and values are international organisations (IOs). To measure a country’s degree of international social integration, we focused on memberships in international organisations. This set of indicators included: the total number of memberships in international organisations; years of membership in the IMF; years of membership in the UN; and years of membership in the General Agreement on Tariffs and Trade and the WTO. Our first step was to conduct a factor analysis of the independent variables. The factor analysis produced two important results. First, the variables clustered into three independent factors, which we labelled ‘international economic integration’, ‘IO memberships’, and ‘development’.2 This clustering strongly confirmed our expectation that the three sets of variables captured distinct and independent phenomena. Second, 268
Research on corruption
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