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

Corruption is an issue of increasing visibility in the academic and policy literature on governance and public policy. Whilst it is often talked about, there appears to be some lack of clarity on both its nature and the nature of its determinants. This has led to some increase in the effort to combat it (in light of its significant costs for society) and it is questionable how effective these attempts have been to date. Purpose This paper presents an analysis of the nature and determinants of corruption, using recent data to clarify the nature of the corruption phenomenon and answer the question whether corruption can categorically be said to be a problem requiring public sector reform, or a consequence of it. Design / methodology / approach The paper analyses data on corruption in relation to the timing of 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 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 ...