Opening Public Officials’ Coffers: A Quantitative Analysis of the Impact of Financial Disclosure Regulation on National Corruption Levels

Disclosure of income, assets and conflicts of interest can serve as powerful public accountability tools to draw attention to the abuse of public office, help prosecute corrupt offenders and create a culture of scrutiny in the public sector that deters corruption. Based on data of the World Bank’s Public Accountability Mechanisms initiative, we present the first indicator that captures a country’s financial disclosure in-law effort. By employing different panel data model specifications, we use this indicator to measure how the introduction of comprehensive financial disclosure systems impacted national corruption levels for 91 countries between 1996 and 2012. We present robust results that provide tentative evidence for a positive and significant relationship between a country’s capacity to control for corruption and the expansion of financial disclosure legislation for the years following the enactment.

Bureaucratic Structure, Regulatory Quality, and Entrepreneurship in a Comparative Perspective: Cross-Sectional and Panel Data Evidence

The article examines the effect of meritocratic recruitment and tenure protection in public bureaucracies on regulatory quality and business entry rates in a global sample. Utilizing a cross-country measure on the extent of meritocratic entry to bureaucracy and a time-series indicator of tenure protection, it subjects theoretical claims that these features improve the epistemic qualities of bureaucracies and also serve as a credible commitment device to empirical test. We find that, conditional on a number of economic, political, and legal factors, countries where bureaucracies are more insulated from day-to-day oversight by individual politicians through the institutional features under consideration tend to have both better regulation, specifically business regulation, and higher rates of business entry. Our findings suggest that bureaucratic structure has an indirect effect on entrepreneurship rates through better regulatory quality, but also exert a direct independent effect.

Background paper on South Korea

Korea is a developed OECD country and a young democracy with a relatively effective governance structure. It is often described as a very successful case of state-led economic development and praised for the successful transition from an authoritarian “developmental state” to a consolidated democracy since the 1980s. The Asian financial crisis that hit Korea in 1997 and the election of the first president coming from the opposition in the same year have been another critical juncture. Since then substantial institutional reforms have consolidated democracy, strengthened civil rights and improved the quality of governance. The country has a well-trained, meritocratic bureaucracy and a largely independent judiciary. Despite the substantial improvements in transparency, democratic accountability and prevention of corruption, many problems remain. Democratic behavior is still not deeply rooted in Korean society and is often undermined by entrenched hierarchical and authoritarian thinking. Korean society is divided into competing networks in which personal trust derives from regional origin and high school/university networks. These personal networks are grouped around powerful individuals and compete for influence, power, jobs and public resources. Democratic changes in governments have ensured that not a single group was able to completely monopolize power, but the competition of networks has prevented the emergence of a universalistic attitude oriented towards the common good. In sum, the distribution of resources is on the border between competitive particularism and ethical universalism with a general positive tendency since the beginning of democratization.