Corruption experience, perception and anti-corruption trust: different effects in various post-Communist states.

• Author: Babos, Pavel
• Position: POLSCI PAPERS - Report

INTRODUCTION

Corruption has been gaining an increasing attention by media, politicians, policymakers and many other relevant actors. Thus, it is hardly surprising that the academic research of corruption is growing as well. While some authors focus on explaining corrupt behaviour (e.g. Tavits 2010), others investigate the effects corruption has on economy (Uslaner 2007), society (della Porta 2000; Pharr 2000) or politics (Mishler& Rose 2005). Considerable amount of research is also devoted to the relationship between the corruption and trust (Anderson and Tverdova 2003; Chang & Chu 2006; Hakhverdian&Mayne 2012). And there is also research showing how the trust, corruption and economic growth are interdependent (Li & Wu, 2010).

This study focuses on three distinct dimensions of corruption and relationships among them. In this study we differentiate between the corruption perception and corruption experience and include both of the dimensions into our investigation. Additionally, we link these two issues to a special kind of trust: the trust in public institutions' anti-corruption performance. Although distinct types of trust, mainly personal and political/institutional have been investigated before (see Anderson & Tverdova 2003; Dalton 2004; Chang & Chu 2006, Hakhverdian & Mayne 2012; Wroe, Allen & Birch 2013; etc.) we have not found any similar research that would narrow down the institutional trust in this particular way. Therefore we believe that focusing on this specific type of trust presents a contribution to current research on corruption.

Another contribution of this paper is that we not only separate the corruption perception from experience, but also disentangle the previously suggested reverse causation between the corruption perception and trust (della Porta 2000; Wroe et al. 2013). There is a debate in the academic literature, whether it is the trust that influences the corruption perception, or vice versa (Wroe et al. 2013). This paper uses structural equation models to disentangle the two causal paths.

Four Eastern European countries are compared in this research. We have chosen Estonia, Slovakia, Slovenia and Romania to investigate and compare the causal mechanisms operating between corruption experience, perception and anticorruption trust. The selected countries have different cultures, as demonstrated by different positions in various rankings comparing corruption. We decided to choose four countries that are different enough in order to also see the differences in the causal mechanisms under investigation. Since the Baltic countries are often considered to be relatively homogeneous, we chose one case representing the region. The same applies to the Visegrad group of countries, out of which we chose Slovakia. Slovenia is in many aspects one of the kind and therefore we included it in the analysis as well. Romania is representing the Balkan region. A more detailed discussion of the country selection can be found in the methodology part of this paper.

This study makes use of the Eurobarometer micro-data that is not so frequently used. However, it provides several items on corruption and thus allows us separating the three dimensions. As mentioned, we apply structural equation modelling techniques to estimate the direct and indirect effects as well as the reverse causal relationships.

The structure of the paper is as follows: after the introduction, we review the theories linking corruption and trust. In the following section we discuss the distinction between the corruption perception and corruption experience. Subsequently we define our variables and describe data and method in a more detailed way and discuss the instrumental variables employed in the model. What follows is the empirical analysis and presentation of the results. Before concluding, we discuss the main contribution of this study as well as the limitations encountered.

Trust and corruption

The link between trust and corruption has been very well established in the previous research. Most voluminous literature focuses on the effect of corruption on the general trust towards political institutions (Mauro 1995; Knack & Keefer 1995; dellaPorta & Vanucci 1999; Pharr & Putnam 2000; Seligson 2002; Rose-Ackerman 2005; Clausen, Kraay & Nyiri 2011; Hakhverdian & Mayne 2012; and others). There is a consensus among scholars, that corruption has negative effect on trust in government, political parties or other political institutions or actors. On the one hand, previous research that shows the relationship between the corruption and general political trust is large and convincing, therefore we feel no need to go into much details at this point. On the other hand, the causal direction of this relationship is not as clear as the link itself. This article thus addresses direction of the relationship between trust and corruption.

In addition to general trust in political institutions, several scholars investigated the link between corruption and specific elements of trust, or trust in particular sectors of public sphere. As the previous research show, higher corruption apparently also leads to lower trust in civil servants and state administration (Tverdova & Anderso, 2003; Hacek, Kukovic & Brezovsek 2013), lower evaluation of the performance of and trust towards justice system and police (Kaariainen & Siren 2007) and decreased satisfaction with public services (Bratton, 2007). Kaufmann and Wei (1999) analysed firm-level data and found that the increased level of corruption leads to more time that managers waste with state officials.

However, the causal path does not necessarily lead solely from the corruption perception to the political (or other type of) trust. Several authors have analysed the opposite causal relation recently. Wroe, Allan and Birch (2013) claim that they excluded the possible causal mechanism from the corruption perception to the political trust by two factors: temporal order of the respective items in the questionnaire and the hypothetical nature of the corruption perception items (for further details see Wroe et al. 2013, p. 182). Using the OLS regression, authors found the effect of the corruption perception on the political trust. However, they admit that there is a possibility that "respondents' level of trust will have been influenced by their previous real-life perceptions of corruption' and thus the effect represents more the "quasi-experimental setting" of the data set "rather than the real world" (2013, p. 182).

Chang and Chu addressed the problem of mutual effect of the two phenomena in Asian countries differently. The authors employed the structural equation modelling and they modelled both of the causal effects simultaneously. They found the influence of the institutional trust on the corruption perception as well, and concluded that there is a "vicious cycle between corruption and institutional trust" and that the two reinforce each other. Morris and Klesner (2010) focused on Mexico and approached the endogeneity problem in the same fashion as the previous authors. Additionally, they included also the interpersonal trust in the analysis. They concluded that the corruption perception does not influence interpersonal trust. However, they confirmed the incidence of the "vicious circle that perpetuates corruption, the perception of corruption, and low levels of trust" (2010, p. 1275).

Corruption experience versus perception

Clausen, Kraay and Nyiri (2011) published an exhaustive study on the relation between the corruption's perception, corruption experience and trust towards public institutions (military, judicial system, national governments and fairness of elections). Their findings show that the corruption in both forms decreases public confidence in the state institutions. However, the lowering effect of the corruption's perception is three times larger than the personal experience of the corrupted behaviour. As noted above, Morris and Klesner (2010) also highlighted the intertwined role of the corruption experience and perception in regard to institutional trust.

Olken (2009) studied the relationship between the corruption perception and corruption reality in Indonesian villages. He concluded that the link between the corruption perception and corruption reality (measured as 'missing expenditures') is rather weak. However, an important finding of Olken is that, in their perception, people can distinguish between the probability of general corruption in the country/district and corruption related to the specific project. The importance of this finding lies in the fact that it casts the shadow on the intuitive link between the corruption experience and perception. According to the logic of Olken's study, if people distinguish between the general corruption and the corrupt behaviour in the particular situation, there is no reason why the experience with corrupt behaviour should automatically lead to higher corruption perception in general.

As it is clear, some of the authors confirmed that there is a link between the corruption experience and perception (Clausen et al. 2011), while others provide contradicting evidence (Olken 2009) arguing that people distinguish the general perception of corruption from the corruption specific to a project or an issue in their village or district.

Hypotheses

It is sometimes argued that people might be capable of differentiating between the petty corruption they usually experience and the grand corruption they mostly read...