In recent years, corruption has become a subject of significant political attention among government of various political colors in East Asia. Why has corruption plague in some society while been inhibited in others? What factors contribute to the variation in the incidence of corruption across economies in East Asia? This study attempts to provide empirical assessment of the source of corruption by using panel data of 11 East Asian economies across 10 years. Corruption is measured by Corruption Perception Index (CPI) which is developed by Transparency International (TI) and widely adopted by a diverse body of empirical literature. Given the change of CPI exhibits strong time-dependent properties, the system general method of moments (system GMM) is introduced in the analysis in order t...[ Read more ]

In recent years, corruption has become a subject of significant political attention among government of various political colors in East Asia. Why has corruption plague in some society while been inhibited in others? What factors contribute to the variation in the incidence of corruption across economies in East Asia? This study attempts to provide empirical assessment of the source of corruption by using panel data of 11 East Asian economies across 10 years. Corruption is measured by Corruption Perception Index (CPI) which is developed by Transparency International (TI) and widely adopted by a diverse body of empirical literature. Given the change of CPI exhibits strong time-dependent properties, the system general method of moments (system GMM) is introduced in the analysis in order to acquire more consistent and unbiased results. Meanwhile, this paper discusses the anti-corruption strategies in Hong Kong and Singapore in the hope of exploring the pluses and minuses of the institutional arrangement to the control of corruption.

The results indicate that the level of corruption in East Asia is significantly associated with the regime type and income inequality. Greater income inequality is correlated with higher level of corruption, while partial democracy is more corrupt than non-democracy or full democracy. Moreover, through the interaction effect in the models of income inequality and regime type, it suggests that the deteriorating income inequality might contribute to greater level of corruption during democratization. Besides, the data also provide evidence of the impact of expansion of the higher education in East Asia on depressing corruption. Before conclusion, I review the anti-corruption strategies in Hong Kong and Singapore, with focus on the ICAC (Independent Commission Against Corruption) in Hong Kong and CPIB (Corrupt Practices Investigation Bureau) in Singapore. It shows how the anomalous empirical features of Hong Kong and Singapore may be explained by their institutional arrangements.