Transition, Governance and Corruption

This paper contributes to the discussion and understanding of corruption in transition countries. Specifically, we use annual data over 1998 - 2002 for 25 transition economies to study factors that cause corruption. Two widely used measures of corruption are employed to test the validity of our findings. Among the various factors that significantly lower corruption, the degree of economic prosperity, role of government, policing, and progress toward transition seem most important. Greater political freedom, on the other hand, seems to in fact increase corruption. Any lingering legacy from Soviet-era institutions does not seem have a perceptible effect on corruption. Some of these findings differ from those for a broader sample of countries and also from those for transition nations with different data. Policy implications are discussed.