Revisiting the Relationship between E-Government and Corruption: An Empirical Investigation

This study reinvestigates the relationship between e-government and corruption taking into account some potential methodological problems encountered in multivariate regression models based on the use of cross-country data. Contrary to the stylized fact that e-government reduces corruption, this study finds that e-government has this effect only in combination with gross domestic product per capita which is a very important factor that affects corruption. Moreover, unlike previous studies investigating this relationship, this study includes in its multivariate regression model economic freedom as an important factor affecting corruption. The key finding here is that economic freedom curbs corruption only at high levels of economic development. The interaction of e-government and wealth on the one hand and economic freedom and level of economic development on the other in curbing corruption suggests that there may be synergies associated with these factors in producing this effect on corruption. Keywords: e-government, economic freedom, corruption, collinearity, heteroskedasticity