The Impact of Corruption on Regime Legitimacy: A Comparative Study of Four Latin American Countries

TLDR

Economists warn that corruption raises transaction costs and hampers growth, while political scientists hold mixed views—some see it as functional for development, others note it erodes public support, yet methodological challenges have hindered testing of these contradictory claims. The study aims to test how corruption experiences affect belief in political legitimacy in four Latin American countries. It employs national sample survey data from over 9,000 respondents across these countries to assess the impact of corruption on legitimacy perceptions. The results show that, independent of socioeconomic, demographic, and partisan factors, exposure to corruption erodes belief in the political system and reduces interpersonal trust, underscoring its political costs.

Abstract

Economists have long warned about the pernicious impacts of corruption, arguing that it increases transaction costs, reduces investment incentives, and ultimately results in reduced economic growth. Political scientists, on the other hand, ever the realists, have had a much more ambivalent view of the problem. Indeed, much classic literature focusing on the Third World saw corruption as functional for political development, enabling citizens to overcome intransigent, inefficient bureaucracies while increasing loyalty to the political system. More recent research, however, points in the opposite direction toward an erosion of public support for corrupt regimes. A series of serious methodological problems has prevented the testing of these contradictory assertions about the impact of corruption. This article uses national sample survey data, with a total N of over 9,000, from four Latin American countries to test the effect of corruption experiences on belief in the legitimacy of the political system. It finds that independent of socioeconomic, demographic, and partisan identification, exposure to corruption erodes belief in the political system and reduces interpersonal trust. The evidence seems clear, at least for these four countries, that corruption carries with it important political costs.