Abstract:
By comparing Korea’s relative level of corruption with that of Taiwan and the Philippines and examining how political economy of corruption has developed over time within Korea, this paper provides a test of existing theories on causes of corruption. I find that inequality of income and wealth best explains the relative level of corruption among these countries and across time within Korea, consistent with You and Khagram (2005). Although developmental state and crony capitalism literature emphasized the “autonomous and uncorrupt bureaucracy” and “rampant cronyism and corruption” in Korea, respectively, I find that Korea has been neither as corrupt as the Philippines and nor as clean as Taiwan. Successful land reform in Korea and Taiwan brought about low levels of inequality and corruption, while failure of land reform in the Philippines led to a high level of inequality and corruption. However, wealth concentration due to chaebol industrialization increased corruption in Korea, in comparison with Taiwan.