A troubled relationship: corruption and reform of the public sector in development

Purpose – This paper aims to present an analysis of the nature and determinants of corruption, using recent data to clarify the nature of the corruption phenomenon and answer the question of whether corruption can categorically be said to be a problem requiring public sector reform, or is a consequence of it. Design/methodology/approach – The paper analyses data on corruption in relation to the timing of the introduction of public sector reform in recent economic transitions, and examines the persistence of increased corruption following the introduction of reforms. Findings – The theoretical model suggests that events that negatively affect administrators in positions of trust create some reactive tendency towards corruption, and this is supported by the evidence from transition economies. There is a significant increase in corruption following transitional economies' public sector reform, and this demonstrates an unusual degree of persistence even after general institutional reforms have been completed. Research limitations/implications – Further research could try alternative measures of corruption, instead of “perceptions” data analysed here, and examine the strength of persistence across a larger set of countries to test the confounding effect of other institutional reforms in the transition countries examined. Practical implications – The costs of new public management reform programmes are broader than is currently suggested, and significant short‐ to medium‐term deterioration might be expected in the aftermath of reform. Originality/value – The paper provides a new approach to corruption research examining the importance of the corruption “tipping points” of individual administrators and how these are significant in modelling corruption.