Correlates of Corruption in India: Analysis and Evidence from the States

Abstract

Several leading indicators of corruption point to a serious problem in India on whole. Yet what explains the substantial variance of corruption levels perceived and experienced by citizens across Indian states? Surprisingly little research in the field has addressed this important question. This analysis elucidates a number of relevant and testable hypotheses from the growing literature on the determinants of corruption and applies them to the case of the Indian states. The estimates of the empirical models show that the level of development – measured both in economic and education terms – and the level of fiscal decentralization are significant and negatively related with levels of corruption. Factors such as income inequality, religious fractionalization, media exposure and whether a state has a bicameral or a unicameral legislature are statistically insignificant.