Table of contents
Study 1: Quantitative Analysis
Study 2: Qualitative Analysis
Quantitative Data set
Interview questions (qualitative study)
Corruption has become one of the forefront managerial issues both at the national and international levels. The concept of corruption is complex and multilateral and it varies across countries. Its different types of expressiveness and intensity can be felt all over the world and have the potential to cause severe complications for a country’s economy and environmental sustainability. According to the Transparency International's 2018 Corruption Perception Index, none of the countries worldwide gets a perfect score. Therefore, we can say that corruption is alive even in western, civilised countries. Denmark scores the highest with a score of 88 out of 100 and is perceived as the country with the least of corruption, where Somalia is perceived as the country with the highest score of corruption, 10 out of 100. Corruption is a significant development threat that poses considerable economic and social consequences. Such interference in public procedures for the sake of personal or private benefit weakens the competitiveness of a single country (Bhargava, 2003). Among facets that might be influenced by the level of corruption scholars distinguish such as GDP per capita, government expenditure, and foreign aid (e.g. Kuton et al., 2007; Ashour, 2006; Svensson, 2005). However, corruption leads to many consequences, such as the setback of economic development, international trade and investment (Glynn et al., 1997), that negatively effects economic growth (Mauro, 1995). Empirical research shows that the existence of high corruption rates considerably hinders the inflow of foreign direct investment (FDI) to host countries (Zhao et al., 2003), negatively impacts economic success (Mauro, 1998), decreases the level of human capital, and ruins confidence in both public and private institutions (Husted, 1999).
Based on perception, there are defined many definitions of corruption. However, for this research we used the one by Transparency International, i.e. “corruption is the abuse of entrusted power for private gain. It can be classified as grand, petty and political, depending on the amounts of money lost and the sector where it occurs.” (Transparency International, 2018) .
Traditionally academic scholars have researched the corruption phenomenon focusing solely on economic and institutional factors as an outcome (Pillay and Dorasamy, 2010; Ashforth, Gioia, Robinson & Trevino, 2008; Cuervo-Cazurra, 2016; Martin, Cullen, Johnson & Parboteeah, 2007), while the cultural perspective has been neglected. After conducting a thorough study on the topic and taking insights from the interviews with experts, this paper aims to fill in this gap and make a contribution to the research topic by taking a cultural approach, in which determinants of corruption in are examined.
This paper will provide new findings how the cultural aspects interrelate with the two concepts, i.e. economic and institutional. The research will close the gap between the economic and institutional approaches that currently exist in the academic world. The relevance of this consideration is justified because the costs associated with corruption do not affect only the economic outcomes. Its impact on society is much wider (Bisogno, Reiterer et al., 2011), what makes it relevant to research the cultural aspect of corruption and, therefore, close this existing gap. Culture has been described by Hofstede’s six cultural dimensions for a national country level and defined as "[...] the collective programming of the mind that distinguishes the members of one group or category of people from others" (Hofstede, 2011:3). He uses six dimensions to subdivide culture: Power Distance, Masculinity, Uncertainty Avoidance, Individualism, Long Term Orientation and Indulgence.
Furthermore, the institutional approach alone is also not applicable. The underlying causes as well as different levels and forms of corruption occurring in different countries cannot properly be explained by formal institutions exclusively (Silitonga, 2018). For this reason, a cultural approach is also more appropriate and will add valuable insights. The complexity of corruption cannot be described as a simple, one-track static phenomenon. On the contrary, it needs to be perceived as a multiplex fact within various countries, which are affected by their local culture. For that reason the culture provides a promising explanation of the underlying cause for those contextual determinants.
Thus, the conducted research is going to investigate and answer the following question:
What are determinants of corruption on a national country level from a cultural perspective with an emphasis on the public sector?
Culture is a constantly changing phenomenon and is therefore embodied or expressed in shared meanings, attitudes and values. For years, researchers analyzed specifically culture in order to determine the right definition, influences and possible dimensions. However, there has never been a clear and widely acknowledged definition (Mironenko & Sorokin, 2018). Burke et al. (1999) defined culture as: ‘A system of shared meanings, attitudes and values and the symbolic forms in which they are expressed or embodied’. Liu (2016) adds that these meanings, attitudes and values and the form in which they are expressed or embodied influence the culture itself as it is a constantly changing phenomenon. Although, they do agree on the steady development of cultural beliefs, it is arguably difficult to specify the cultural phenomenon. Hofstede (2011) acknowledged these findings and challenged these results. According to Hofstede, culture rather consists of six dimensions which characterise a nation’s, as well as a company’s cultural beliefs and therefore the changing phenomenon of culture (Beugelsdijk, Kostova, Roth, 2017). According to Lo, Water and Christensen (2017, P.52) Hofstede therefore defined culture as “the collective programming of the mind that distinguishes one group or category of people from another”. Lo et al. (2017) and Beugelsdijk et al. (2017) stated that the Hofstede’s dimensions are widely acknowledged and used and therefore seen as most appropriate within the phenomenon of culture. We acknowledge that result. Hofstede focused on individualism versus collectivism as the relative prioritization of groups versus individuals. Second, Hofstede focused at the masculinity versus the memininity of people in a society as it focuses on the proportion of having a preference for relationships versus the preference for achievements. Third, Hofstede focused on the power distance and tolerance for the level of hierarchy and inequality between one and another and more specifically, on the hierarchy and inequality between people and their superiors. Next, Hofstede focused at the level of uncertainty avoidance versus the level of tolerance for ambiguity within people’s reasoning. Additionally, added in in the last decade as he missed certain characteristics, Hofstede added the focus at long-term orientation versus the implicit focus at the short-term orientation. At last, Hofstede added the focus at indulgence versus the restraint of people. It basically focuses at the level of tolerance for action versus the level of regulation which will suppress people’s cultural beliefs.
Liu (2016) adds that “culture has a significant positive effect on misconduct of human behaviour which results in corruption such as earnings management, accounting fraud, option backdating, and opportunistic insider trading”. Additionally, those individuals have a direct effect on individuals beyond their own meaning, values, attitudes and symbolic forms in which they are expressed or embodied. As aforementioned through Liu (2016), corruption influenced nation’s economy for years and for possibly years to come. However, it keeps companies from entering the nation which keeps the countries from further economic growth. Most researchers focused on political and economic reasons for corruption, but not on the specific cultural influences (Buscagli & van Dijk, 2003; Pillay & Dorasamy, 2010; Lee & Guven, 2013). Buscagli & van Dijk (2003) explain that rather the socio-economic influences on corruption are well explained and identified. Besio and Pronzini (2013) confirm these findings but add their identification and definition on corruption.
However, when deep diving into defining the corruption, it becomes clear that corruption is originated in all different types and that corruption is more or less always involved in institutions. A common definition which is used in corruption is the from the Transparency International: “corruption is the abuse of entrusted power for private gain. It can be classified as grand, petty and political, depending on the amounts of money lost and the sector where it occurs.” (Transparency International, 2018) . This corruption definition is used in both quantitative and qualitative analysis. But to go in depth in qualitative research, corruption can be distinguished in many other categories. The following types of corruption have been distinguished:
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Source: Doig, A., & Theobald, R. (2013). Corruption and democratisation. Routledge.
Furthermore, Zimring and Johnson (2015) describes two types of definitional issues, which also should be taken into account. The first issue is the scope of corruption, as the first definition they gave as: any abuse of power. But what exactly is the breadth of this abuse of power is hard to define. At second, Zimring and Johnson (2015) give an issue that unintended abuse of power must be taken into account. Honest mistakes are unnecessary to take within the definition of corruption.
We therefore chose to identify the strength of the pronounced cultural relationship of Hofstede’s dimensions with corruption on a national level in the public sector. While analysing Hofstede’s dimensions within the cultural construct, we acknowledged that power distance and masculinity are pronounced to have the most influence on corruption (Beugelsdijk et al., 2017; Lo et al., 2017). Power distance thrives to assess the power of institutions. As corruption often occurs in the institutions of countries, and the abuse of power is considered as corruption. Moreover, the more the power is distributed unequally, the likelier the concept of corruption is occuring. Masculinity thrives to describes the culture of the inhabitants of the country/institution. Therefore, masculinity. and power distance are used within this research (Hofstede, 2011).
The target of the research is to identify and explore whether national culture influences the level of corruption at a country level. To achieve this aim the mixed methods research has been chosen to analyze our topic. In particular, the fully mixed sequential dominant status design has been taken as the most appropriate type of mixed methods research for analyzing corruption at a country level (Leech & Onwuegbuzie, 2007: 271-272). The mixed method research applies to a methodology of research, which moves forward the systematic combination of quantitative and qualitative data within a distinct study “for the broad purposes of breadth and depth of understanding and corroboration” (Johnson et al. 2007: 123). Such integration allows a higher level of completeness and symbiotic utilization of available data than permit separate quantitative and qualitative data selection and analysis (Johnson et al., 2007; Wisdom, Creswell, 2013).
In this project quantitative and qualitative data were collected and analyzed in two phases accordingly; the emphasis is made on the qualitative phase primarily focusing on the data acquired from the experts’ interviews. As Johnson and Onwuegbuzie (2004) clarify, both research methods have their strengths and weaknesses. Quantitative research has a narrow focus and has a predefined structure and content. However, the quantitative method is not focused at clarifying the actual reasons behind the relationship and therefore building an in-depth explanation of the problem. In its turn, the qualitative research method is more convenient for clarifying the actual reasons behind the relationship with in depth interviews but lacks the ability to clarify the strength of the relationship (Johnson et al., 2007; Wisdom, Creswell, 2013).
There can be emphasized several advantages while using a mixed methods research for the chosen study project on corruption. First, it compares both quantitative and qualitative data. Mixed methods are particularly useful in detection and understanding of various contradictions between obtained quantitative findings and qualitative results (Wisdom J., Creswell JW., 2013). Secondly, mixed methods study demonstrates also participants’ point of view and ensures that research findings are based on participants’ experiences (Creswell JW, Plano Clark VL., 2011). Third, it insures methodological flexibility. A mixed methods approach provides great flexibility and is highly adaptable to various study designs, such as empirical studies and randomized tests, to explicate more information than may be acquired in only quantitative research (Creswell JW, Plano Clark VL., 2011). Furthermore, the mixed method research allows to collect valuable, comprehensive data by integrating quantitative with qualitative data in order to produce a more complete story than either method would do separately (Wisdom J., Creswell JW., 2013).
For our study we investigated the relationship between culture and corruption. To analyse the relationship, we set up hypotheses that were tested in our quantitative and qualitative analysis. The hypotheses were linked to Hofstede’s cultural dimensions and the Transparency International Index. The following two hypotheses were set up as follows:
H1: Hofstede’s cultural dimensions, power distance, shows a significant relationship and affects the Transparency International index score.
H2: Hofstede’s cultural dimensions, masculinity vs femininity, shows a significant relationship and affects the Transparency International index score.
We believe that these dimensions by Hofstede can affect the score of the Transparency International Index in a way that corruption is increasing. So, the higher the score of Power Distance, the higher the level of corruption in a country. Also, the more masculine the culture of a country, the higher the level of corruption.
Study 1: Quantitative Analysis
During this phase of studying the research topic the quantitative data has been gathered. In study 1 we have analyzed the data on corruption at the national level provided by the Transparency International institution in particular, the Transparency International Index of 2018 has been used to analyze 96 countries on the rate of corruption. Moreover, as the control variables for the research we have taken the level of democracy for the countries worldwide provided by The Economist Intelligence Unit’s Democracy Index 2018, and the GDP of 2018 per capita for every country under consideration according to the World Bank. Thereafter, the statistical analyses have been performed in SPSS. However, the quantitative study has a quite narrow focus and is not enough to clarify in depth the actual reasons behind the relationship of national culture and corruption at a country level. Consequently, the we have decided to make an emphasis on the qualitative study.
The sample consists of 96 countries across the world. We preferred to use all 180 countries, however, there was no possible connection to be made regarding the availability of the data. The 96 countries have a scores on Hofstede’s cultural dimensions, Corruption Perception Index and both control variables. Therefore, 96 countries are used based on the availability of the data from Hofstede’s dimensions and the corruption perception index. The sample of countries is well spread across the world. Countries from Africa, Asia, Europe and American are represented in the study. The scores given on corruption differ from 0-100, where 0 is for a country that is highly corrupt and 100 to a country where is no corruption. The Democracy Level of The Economist is ranked from 0-10, where 0 is a country with no democracy and 10 a perfect score of democracy. The GDP of 2018 is in millions. To have a look at all the samples, see appendix I.
To seek for a direct relationship between Hofstede’s cultural dimensions and the Corruption Perception Index, we used the SPSS linear regression model. We looked for the significant relationship between the dependent variable corruption and the independent variables, power distance and masculinity. The significance, p-factor, is important to be between the boundaries. Furthermore, we were adding two control variables to the linear regression model. These were as mentioned the GDP of 2018 and the Democracy Index of The Economist. We were adding these control variables to look for the strength of the relationship between corruption and culture. Therefore, the GDP and Democracy index are chosen as variables that can influence the level of corruption in a country. The control variables show within the landscape of the corruption a better perspective as the variables are economical and political. At the end, it allows us to distinguish the significance of the relationship of culture and corruption.
As it has been already mentioned above, we have tested the following hypotheses:
H1: Hofstede’s cultural dimensions, Power Distance, shows a significant relationship and affects the Transparency International index score.
H2: Hofstede’s cultural dimensions, masculinity vs femininity, show a significant relationship and affects the Transparency International index score.
After running the linear regression models, we have found no significant relationship between Hofstede’s cultural dimensions and the Corruption Perception Index. Power Distance (p=0,131) shows no significant relationship as masculinity (p=0,155) also shows no significant relationship with corruption. Control variables GDP (p=0,000) and the Democracy Index (p=0,005) show a significant relationship with the Corruption Perception Index. Thereby, the Cultural Dimensions of Hofstede shows a negative relationship with CPI and GDP and Democracy Index show a positive relationship with CPI. Interesting to state is, that with one of the control variables, power distance has a significant relationship on corruption. Hence, we can find that the control variables, GDP and Democracy Index, have more influence on the Transparency International Index score than the Cultural dimensions of Hofstede, Power Distance and masculinity. Also, we ran a linear regression model to test this finding as well. Table 1 shows the results of this regression as well. The result of model 1, only the control variables, shows a highly significant relation to the score of the Transparency International Index.
Results from the Regression Analysis
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Note: Dependent variable: Corruption
Unstandardized coefficients are shown with standard errors in parentheses.
+p ≤ .10; *p ≤ .05 **p ≤ .01 *** p ≤ .001; two-tailed tests.
In model 1 we have determined the relationship between the control variable and corruption. In model 2 we have added the two independent variables. H1 is the power distance of Hofstede cultural dimensions. and H2 is the masculinity of Hofstede’s cultural dimensions.
Study 2: Qualitative Analysis
In the second study of analyzing the research topic, a qualitative approach has been made on the data acquired from the experts’ interviews. The aim of the semi-structured interviews was to obtain in-depth insights of the influence of national culture on the state of corruption at a country level. In addition, we sought to understand differences by the type of corruption.
This allowed us to collect valuable, comprehensive data by integrating quantitative with qualitative data in order to produce a more complete story than either method would do separately (Wisdom J., Creswell JW., 2013). Furthermore, going to qualitative phase would allow for more divergent findings of the research project in the end.
Consequently, such integration allows a higher level of completeness and symbiotic utilization of available data than permit separate quantitative and qualitative data selection and analysis (Johnson et al., 2007; Wisdom J., Creswell JW., 2013). The approach to research corruption at a country level from the cultural lens provides room for the mixed methods research to contribute to further knowledge about how the national culture dimensions impact on the level of corruption. The chosen mixed methods approach proposes feasible, information-abundant data that may considerably complement traditional quantitative study approaches (Creswell JW, Plano Clark VL., 2011; Wisdom J., Creswell JW., 2013).
The sample comprises of 4 persons. The prerequisite was, that each of them is expert on the field of corruption and also did research on culture or culture related subjects which allowed them to understand the relation we were researching. Two of them (P1 and P2) were scientific researchers at Vrije Universiteit Amsterdam.