A Comparative Study of Inequality and Corruption
By Jong-sung You and Sanjeev Khagram
From American Sociological Review Vol. 70, No. 1, 2005
I.Objectives of Study
To give a theoretical account of why income inequality increases corruption To show the explanatory ability of income inequality and the interaction between inequality and democracy tested empirically against competing conventional explanations of corruption To conduct a methodological study, using statistical techniques, in finding the causes of corruption.
The study tackles the issue on corruption using both theoretical and methodological techniques to approach the hypotheses. The first part of the paper gives a detailed account of instances of corruption all throughout the world and all throughout history, citing trends that have prevailed throughout the course of history. Moreover, the author makes an argument that corruption and inequality are somehow correlated, much more than previous works have shown. It points out the cyclical nature of the two, that the presence of corruption eventually leads to inequality, and that experiencing inequality would lead one to succumbing to corruption. The second and the more dominantly used approach to discuss the issues raised was the use of methodological techinques, specifically statistical methods, to gather data and information from thousands of people all over the world. Prior to this study, only simple statistical methods had been used (such as ordinary least squares) by the researchers in order to relate corruption with income inequality. This study started where the previous studies ended, this time using more complex systems such as two-stage least squaress (SLS) method to arrive at a more accurate and substantial values. Also, a wide variety of control variables and different measures for corruption were used in order to test the quality of results.
The paper was able to make several key points, and I shall quote the four hypotheses.
"Greater income inequality is associated with higher levels of corruption."
As the paper mentioned, as income inequality increases, the rich have more to lose if they go through fair political, administrative, and judicial processes. Of course, they do not wish to lose whatever it is they have be it power, wealth, status, an image, etc., and so they will do whatever it is they can in order to keep things the way they are, which highly favors them.
With the increased inequality in income, the rich will have more resources that can be used to persuade others, to "buy" their influence both legally (like through electoral campaigns) and illegally (through bribery). Moreover, the rich can use their resources in order to steer legal proceedings and lawmaking processes in their favor.
As income inequality increases, others will become poorer relative to the others who have gained much. Because they are experiencing disparity, they will try to push the government to make changes. An example of this would be to restructure the current tax system such that more will be collected from the rich and less will be collected from the poor. The rich, however, do not want this to happen, and so they will use their resources and corrupt practices in order to influence legal matters and either prolong or completely abolish the proposal for a more extensive tax collection system. If the rich have more to lose at higher levels of income inequality, the poor on the other hand will have less or nothing to lose and more to gain from combating corruption. The middle and lower classes will have a reason to monitor, criticize and take action against the corrupt rich and powerful people in society. However, they lack several very important things needed to fight corruption resources and influence. These two belong to the rich and powerful, and will most often than not be used by the corrupt in order to silence...