Private-Sector Corruption: Measurement and Cultural Origins

Research on corruption has made substantial progress in recent years. Yet, most studies still treat corruption as a homogenous phenomenon. This article argues that private-sector corruption can be distinguished conceptually from public-sector corruption, which has been in the spotlight of empirical research. We introduce the first indicator of private-sector corruption covering a large cross-section of countries. This new indicator is used to extend a recent empirical study on the cultural determinants of public-sector corruption (Kong and Volkema in Soc Indic Res 127(1):139–152, 2016). We find that self-serving leadership in high-income countries is associated with more corruption in both the public and the private sector. Furthermore, individualistic leadership in low-income countries is linked to reduced private-sector corruption. Next, we test a number of alternative cultural explanations for differences in private-sector corruption across countries. Overall, our results suggest that specific forms of corporate leadership culture matter for private-sector corruption, but also religious identity and trust play an important role.