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17 Rev. Eur. Stud. 26 (2025)
Diverse Democracies, Divergent Corruption: Examining the Impact of Democratic Governance Models in Curbing Corruption

handle is hein.journals/rveurost17 and id is 31 raw text is: Review of European Studies; Vol. 17, No. 1; 2025 ISSN 1918-7173 E-ISSN 1918-7181 Published by Canadian Center of Science and Education Diverse Democracies, Divergent Corruption: Examining the Impact of Democratic Governance Models in Curbing Corruption Santhosh VENUGOPAL 1& Manel DAHMANI2 1 Brest Business school, France 2 IES Business school, France Correspondence: Santhosh VENUGOPAL, Brest Business School, France Received: March 22, 2025 Accepted: May 7, 2025 Online Published: May 29, 2025 doi:10.5539/res.v17n1p26 URL: https://doi.org/10.5539/res.v17n1p26 Abstract This study examined the impact of various democratic models on regime corruption. This study focuses on four types of democracy: liberal, deliberative, participatory, and egalitarian. Principal component regression was conducted on data from 183 countries spanning the period 1900-2022. The results show that liberal democracy significantly reduces regime corruption, suggesting that higher levels of liberal democratic values effectively curb it. The results indicate that there is no significant relationship between deliberative democracy and regime corruption, suggesting that deliberations do not directly influence corruption. Contrary to expectations, participatory democracy exhibited a significantly positive relationship with regime corruption, implying that corrupt actors might exploit vulnerabilities inherent in participatory mechanisms. Therefore, although participatory processes are essential for democratic engagement, they must be carefully designed and managed to prevent their misuse. On the other hand, egalitarian democracy shows a significantly negative relationship with corruption, emphasizing the importance of equal opportunities to curb corruption within democracies. These findings underscore the need to examine democratic governance from a more nuanced perspective. Liberal and egalitarian values are critical in developing effective anticorruption strategies. Keywords: liberal democracy, deliberative democracy, participatory democracy, egalitarian democracy, principal component regression, corruption JEL code: D73; H11; 057 1. Introduction Corruption, particularly 'regime corruption, is recognized as a significant impediment to progress as it undermines the rule of law and erodes public trust in institutions. An assessment of the scholarly literature on the subject indicates that the relationship between corruption and economic growth is not straightforward and would depend largely on the context. Some studies indicate that corruption negatively affects firm performance (Gaviria, 2002) and lowers overall investment and economic growth (Appiah et al., 2020; Mauro, 1995). Interestingly, some studies assume that corruption may have a positive impact on economic parameters such as foreign direct investment(Egger & Winner, 2005). A study conducted in the Israeli context found that corruption impacts investment behavior (Zelekha & Bar-Efrat, 2011). Of recent vintage is the study by Tutuncu and Bayraktar (2024), who find that democracy per se is beneficial for all countries, but corruption may have a subversive effect on some countries but may be beneficial for countries such as Mexico and Indonesia, where they hypothesized that it may help in overcoming bureaucratic hurdles and thereby be conducive to economic growth. However, democracy itself maybe conducive in reducing corruption (Oueghlissi & Derbali, 2024). Despite the contradictory findings in previous studies, it is clear that corruption subverts the rule of law and therefore creates dissonances that have far-reaching ramifications. A closer assessment of the literature indicates that the impact of corruption is nuanced and largely dependent on the type of governance. This point was highlighted by Saha and Sen (2021), who noted that corruption tends to be beneficial in countries with autocratic tendencies, whereas democracies may exhibit lower growth in the face of perceived corruption. An examination of scholarly literature shows that corruption is fueled by incentives that reside within the architecture of the governance structure. There has been a growing shift towards democratization (Fukuyama, 2015), making it crucial to assess how democratic setups encourage or deter corruption. The literature on democracy reveals that it is not a monolithic construct but rather manifests itself in different forms with distinct characteristics. Dahl (1971) stated that democracies reside on a continuum between inclusiveness and contestation. Coppedge et al. (2016) identified strands that delineate democracies based on their components, and provided measures that distinguish between polyarchy, liberal 26

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