Political Economy of Corruption: Resource Rents,Democracy and Corruption

Most of socio-economics and political problems of rentier economies can be well explained in terms of their dependancy on revenue earned from exports of oil, gas and other naturalresources.Corruption is directly related to such activities.Rent seeking activities affect political structures of such socities. Windfall gain from oil exports provide little incentive fordesigning appropriate tax system,undermining transparency and accountability which are the bases of democracy.As it is expected and varified by various scholars there is a negative relationship between democracy and corruption.As the countries move away from democracy, they intensify corruption.In this paper we concentrate on analysing theoretically, the relationship between rent seeking, democracy and corruption, deriving on the published reports by Transparency international Organization using Indices of democracy and corruption of different countries to support our arguments.We came to this conclusion that rentier economies, lacking democratic system would havemore corruption than others.Unlike other countries,Canada and Norway, despite their rich natural resources have relatively little corruption owing mainly to their democratic systems