Modeling Public Sector Corruption and the Institutional Environment in Emerging Economies: An Institutional Theory View

Abstract

This paper models and empirically explores the institutional environment in emerging economies concerning public sector corruption. Employing perspectives from institutional theory, the paper develops strategies for reducing the perceived level of corruption by assessing the interaction between regulatory, cognitive, and normative institutional elements. We find that the regulatory, institutional elements, the legal system, and business, and professional associations have a positive linear relationship with reduced perceived level of corruption. In contrast, the freedom of the media does not have a linear relationship with the perceived level of corruption and serves as a moderator. Finally, the interaction effect between the legal system and the media is stronger than the interaction effect between the media and business and professional associations.