Corruption and Social Capital: Findings From Selected OECD Countries

Abstract

Corruption, a pervasive global challenge, erodes trust in institutions, hinders development, and deepens inequalities. While numerous factors contribute to its persistence, this abstract explores the potential of social capital, the networks and norms of trust within a society, to act as a powerful antidote. However, the relationship between social capital and corruption is not always straightforward. Informal networks, while fostering trust, can also create opportunities for collusion and exclusion. Moreover, the effectiveness of social capital in combating corruption is contingent upon its equitable distribution within a society. Unequal access to social networks can exacerbate existing power imbalances and hinder collective action against corrupt elites. Panel regression anaylsis reveals that a 1 unit increase in social capital increases Corruption Perceptions Index (CPI) by 0.138891 units (100 is very clean and 0 is highly corrupt). In conclusion, while social capital is not a panacea for corruption, its potential to foster trust, norms of fairness, and collective action makes it a valuable tool in the fight against this complex phenomenon. Further research is needed to understand the specific contexts and mechanisms through which social capital can be most effectively harnessed to promote transparency, accountability, and ultimately, good governance regarding to fight against corruption. JEL Codes: D73, H26, O11