Research Paper on Re-examining the Evidence for Developing Countries in the Political Capacity and Corruption Nexus

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Title: Re-examining the Evidence for Developing Countries in the Political Capacity and Corruption Nexus

Abstract: The question of whether developing nations with strong political capacity have lower levels of corruption is explored in this article. Despite the prevalence of literature on corruption, it has not been addressed in the existing academic literature how a state’s political capacity and corruption relate to one another. Relative Political Capacity (RPC), an indicator that evaluates the effectiveness of governance by its ability to meet or exceed their expected extractive capabilities and its ability to implement a set of policy choices, has been used by the authors to measure the political capacity of a nation. In order to pursue their political and economic objectives, such as lowering corruption, politically strong and stable governments are necessary. However, a strong political position gives them the chance to engage in corruption and rent-seeking. This suggests that a state’s robust political system can either be a “boon” or a “bane” for enacting a particular set of policy objectives. Based on this claim, the authors investigate whether a strong relative political capacity influences corruption levels in a positive or negative way. The hypothesis is tested using the ordinary least-squares and two-stage least squares methods for 98 developing nations. The results imply that political power has at least equal explanatory power to commonly acknowledged causes of corruption, such as economic growth and democracy.

Keywords: relative political capacity; state’s capacity; institutions; corruption; developing countries

Paper Quality: SCOPUS / Web of Science Level Research Paper

Subject: Economics

Writer Experience: 20+ Years

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