Gurgur, TugrulShah, Anwar2012-06-222012-06-222005-01https://hdl.handle.net/10986/8899An extensive literature on the relationship between decentralization (or localization) and corruption has developed in recent years. While some authors argue that there is a positive relationship between decentralization and corruption, others claim that decentralization in fact leads to a reduction in the level of corruption. This important policy question has not yet been laid to rest, since previous empirical work simply uses eclectic regressions and lacks a conceptual framework to discover the root causes of corruption. This paper attempts to fill this void by presenting a framework in identifying the drivers of corruption both conceptually and empirically in order to isolate the role of centralized decision-making on corruption. The following results emerge: 1) For a sample of 30 countries (developing and industrial), corruption is caused by: a lack of service-orientation in the public sector, weak democratic institutions, economic isolation (closed economy), colonial past, internal bureaucratic controls and centralized decision making. 2) Decentralization is found to have a negative impact on corruption, with the effect being stronger in unitary than in federal countries.CC BY 3.0 IGOACCOUNTABILITYADMINISTRATIVE DECENTRALIZATIONADMINISTRATIVE DISCRETIONANECDOTAL EVIDENCEANTICORRUPTIONANTICORRUPTION EFFORTSBANKSBRIBERYBRIBESBUREAUCRACYCENTRAL GOVERNMENTCITIZEN PARTICIPATIONCITIZENSCIVIL LIBERTIESCIVIL RIGHTSCIVIL SERVANTSCIVIL SERVICECIVIL SOCIETYCOLLUSIONCOMMUNITIESCOMMUNITY GROUPSCORRUPT OFFICIALSCORRUPT PRACTICESCORRUPTIONCORRUPTION IN GOVERNMENTCORRUPTION PERCEPTIONSCORRUPTION PERCEPTIONS INDEXCPICRIMECRIMINAL LAWDECENTRALIZATION INITIATIVESDEMOCRACYDEMOCRATIC RIGHTSELECTED OFFICIALSEMPIRICAL EVIDENCEEMPIRICAL RESEARCHEMPLOYMENTETHNIC GROUPSETHNIC HETEROGENEITYEXPENDITURESEXTORTIONFEDERAL STATESFISCAL DECENTRALIZATIONGOVERNMENT CONSUMPTIONGOVERNMENT EXPENDITURESGOVERNMENT INSTITUTIONSGOVERNMENT INTERVENTIONGOVERNMENT MANDATESGOVERNMENT OFFICIALSGOVERNMENT PERFORMANCEGOVERNMENT PROPERTYGOVERNMENT SIZEGOVERNMENT SPENDINGGOVERNMENT STRUCTURESHIGH CORRUPTIONINTERJURISDICTIONAL COMPETITIONJURISDICTIONSJUSTICELAWSLEVELS OF GOVERNMENTLOCAL AUTHORITIESLOCAL ELECTIONSLOCAL OFFICIALSLOCAL POLITICIANSMEDIAMOTIVATIONSNATIONSNEPOTISMPARLIAMENTARY COMMITTEESPARLIAMENTARY OVERSIGHTPARTY DISCIPLINEPENALTIESPETTY CORRUPTIONPOLICY RESEARCHPOLITICAL CONTROLPOLITICAL DECENTRALIZATIONPOLITICAL INSTITUTIONSPOLITICAL RIGHTSPRIVATE SECTORPROCUREMENTPUBLIC INVESTMENTPUBLIC OFFICIALSPUBLIC SERVICEPUBLIC SERVICE DELIVERYPUBLIC TRUSTPUNISHMENTRENT SEEKINGRULE OF LAWRULES OF CONDUCTSERVICE DELIVERYSIZE OF GOVERNMENTSOCIAL DEVELOPMENTSOCIAL GROUPSSUBNATIONAL GOVERNMENTTAX SYSTEMSTRANSPARENCYTRANSPORTATIONUPPER HOUSEVETOVETO POWERWorld Bank10.1596/1813-9450-3486