Determinants of corruption in developing countries: case of Tunisia
| DOI | https://doi.org/10.1108/JFC-02-2021-0037 |
| Published date | 13 May 2021 |
| Date | 13 May 2021 |
| Pages | 111-127 |
| Subject Matter | Accounting & finance,Financial risk/company failure,Financial crime |
| Author | Azzouz Zouaoui,Mounira Ben Arab,Ahmad Mohammed Alamri |
Determinants of corruption in
developing countries:
case of Tunisia
Azzouz Zouaoui
Department of Business Administration, King Saud University,
Riyadh, Saudi Arabia
Mounira Ben Arab
University of Tunis, Montfleury, Tunisia, and
Ahmad Mohammed Alamri
King Saud University, Riyadh, Saudi Arabia
Abstract
Purpose –This paper aims to investigatethe economic, political or socioculturaldeterminants of corruption
in Tunisia.
Design/methodology/approach –To better understand the main determinants of corruption in
Tunisia. This study uses The Bayesian ModelAveraging (BMA) model, which allows us to include a large
number of explanatoryvariables and for a shorter period.
Findings –The results showthat economic freedom is the most important variableof corruption in Tunisia.
In second place comesthe subsidies granted by the government, which is one of the best shelters of corruption
in Tunisia through their use for purposesdifferent from those already allocated to them. Third, this paper
finds the high unemployment rate, which,in turn, is getting worse even nowadays. The other three factors
considered as causal but of lesser importance are public expenditures, thehuman development index (HDI)
and education. Education, the HDI and the unemploymentrate are all socio-economic factors that promote
corruption.
Originality/value –The realization of this study will lead to triple net contributions. The first is to
introduce explicitly and simultaneously political, social and economic determinants of corruption in
developing countries.Second, unlike previous studies based on the simpleand generalized regression model,
the present research uses anothernovel and highly developed estimation method. More precisely,this study
uses the BMA model, on the set of annual data for a period of 1998–2018. The third contribution of this
researchresides in the choice of the sample.
Keywords Social, Corruption, Economic development, Political, Bayesian Model Averaging
Paper type Research paper
1. Introduction
The causes and consequences ofcorruption have been the subject of many research studies
and reports of decision and policymakers since the end of the 90
th
. According to Mauro
(1995) and Wei (1999), corruption may have a negativeimpact on the productivity of public
spending and economic growth. The World Bank (2001) gave more attention to the
JEL classification –O10, O11, O17, O55
This research project was supported by a grant from the “Research Unit in Riyadh Community
College”, Deanship of Scientific Research, King Saud University.
Determinants
of corruption
111
Journalof Financial Crime
Vol.29 No. 1, 2022
pp. 111-127
© Emerald Publishing Limited
1359-0790
DOI 10.1108/JFC-02-2021-0037
The current issue and full text archive of this journal is available on Emerald Insight at:
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phenomenon of corruption in 2001and estimates that the cost of corruption is about 25% of
gross domestic product(GDP) in the case of the Africa Union.
The empiricalresearch studiesin the field of corruption encountermany difficulties dueto
the nature and thequality of collected data relatedto its measurement and its characteristics,
as it is qualifiedas a secret activity and generallyhappens in complicatednetworks.
Since the 1980s, different organizations have proposed multiple tools of corruption
perception measurement based on surveys, interviews and questionnaires done with
different public and privateresponsible and different networks worldwide.
The corruption perceptionindex (CPI) is qualified as one of the best indicatorsto measure
corruption perception and published annually since 1995 by an international non-
governmental organization “Transparency International.”The construction of this index is
based on surveys of citizens, responsible and expertsin countries giving information about
their perception of corruption (frequency and amount of paid bribes). However,
Transparency Internationalprovides a score (0–100) and ranking for each country.
The secondindex which gives a measurement of theperception of corruptionis the control
of corruption (CC) provided by the World Bank and is calculated on the basis of the World
GovernanceIndicators (GTI).This index tries togive a response to the following question:
Q1.“How the public power is exercisedto favor the private purposes both for big and
little corruption?”
Determinants of corruption have been the subject of many different studies in time and
space and focused in particular on the most important such as political factors (Persson
et al., 2001;Treisman, 2000; Leite and Weideman, 1999; Lederman et al., 2005) or socio-
cultural factors (La Porta et al., 1997, 1999; Husted,1999; Paldam, 2002; Getz and Volkema,
2001; Ades and Di Tella, 1999; Leite and Weidmann,1999; Swamy et al., 2001; Shaw, 2005).
The objective of this paper is to try to be as exhaustive as possible regarding the
economic, political or sociocultural determinants. Therefore,this paper will be organized as
follows: Section 2 will be devotedto the literature review of the determinants of corruption in
their different forms. Section 3 will focus on an empirical study of the determinants of
corruption in the particularcase of Tunisia. Section 4 concludes the paper.
2. Literature review
The corrupt action is generally associated within a network engaging a privateagent and a
public one, by this action a public officer award a lucrative contract to a private company
and gain a financial interest. The corrupt action is in most cases associated with the
payment of a bribe by a private agent to a public officer in exchange for a favorable
government decisionfor the benefit of the private agent. The value of these bribes will be the
result of the negotiationbetween the private agent and the public officer.
The relation engaging the two corrupted agents can be analyzed through a demand and
supply process in which the supply side (privateagent) provides a bribe to the demand side
(public agent) after making a comparison between the potential benefits (economic rents)
and costs and expenses including psychic costs and sanctions and social censorship if the
operation is discovered. On the demand side, the officer accepts a bribe by comparing the
benefits of additional income with the psychic costs and the costs of criminal sanctions, as
well as social censorshipif it occurs.
As mentioned above the determinants of corruption have been analyzed from different
sides and multiple factorscan be arrangedthrough economic, social and political factors.
Using different corruption index measurement many studies have analyzed the determinants
of corruption providing international comparison such as Ades and di tella (1997), Jain (2001),
JFC
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