Corruption in Asia: Pervasiveness and arbitrariness
Kyeungrae Kenny Oh
Published online: 12 January 2007
Springer Science + Business Media, LLC 2007
How does one understand the differences and similarities of corruption amongvarious Asian countries? We use a recent framework developed by Rodriguez, Uhlenbruck,and Eden (2005) to suggest that corruption has to be examined from two different dimensions: pervasiveness and arbitrariness. Using this framework, we ask why someAsian countries are able to achieve high levels of economic growth in the midst of highlevel corruption while other countries suffer from economic stagnation. We specificallysuggest that more firms would bribe when pervasiveness is high, while fewer firms would bribe when arbitrariness is high. We also look into the implications on foreign direct investment.
Corruption.Pervasiveness.ArbitrarinessThe 1997 Asian economic crisis was a shock to many individuals, not only because of theeconomic collapse of many affected countries in Asia, but also because of the puzzle it provoked: How the amazing pre-1997 economic development was possible in somecountries with rampant corruption. Considering that it is a common belief that economicgrowth cannot be based on corruption (Mauro,1995; Rose-Ackerman,1999), it is natural to
be puzzled. Not all, but many countries in Asia were enjoying their economic prosperity oncorruption, which was widely revealed to the outside world only after the 1997 economiccrisis.
Asia Pacific J Manage (2007) 24:97
114DOI 10.1007/s10490-006-9027-yWe thank Mike Peng, Editor-in-Chief of the
Asia Pacific Journal of Management
, for his helpful comments.We also thank Yung Hua, Managing Editor, for editorial assistance. A portion of this work was presented at the 2006 Academy of International Business in Beijing and The University of Texas at Dallas. We appreciatethe comments from David Deeds, Greg Dess, David Ford, Livia Markoczy, Mine Ozer, Jane Salk, and allconference and seminar participants.S.-H. Lee (
K. K. OhSchool of Management, The University of Texas at Dallas, Richardson, TX 75088-0688, USAe-mail: email@example.comK. K. Ohe-mail: firstname.lastname@example.org