Investigating the Effects of Social Capital on Financial Corruption in Iran

Shaghaghi Shahri, Vahid; Vahed Rasooli, Shirin

doi:10.22034/jss.2025.2000124.1774

Investigating the Effects of Social Capital on Financial Corruption in Iran

Document Type : Original Article

Authors

Vahid Shaghaghi shahri ¹

Shirin Vahed rasooli ²

¹ Assistant Professor in Economics, Kharazmi University, Tehran, Iran

² Ph. D. Student in Economics, Allameh Tabataba'i University

https://doi.org/10.22034/jss.2025.2000124.1774

Abstract

Financial corruption is one of the most important causes of weakening economic growth and development. The World Bank has raised the issue of good governance as the main topic of economic policies of governments, especially in underdeveloped and developing countries. One of the most important indicators of good governance is the fight and eradication of corruption. The importance of fighting corruption has led to extensive studies on the factors affecting the control of financial corruption in recent years.
The aim of this article is to examine the effects of social capital on financial corruption in Iran. For this purpose, after estimating the fuzzy social capital and financial corruption in Iran, the autoregressive model with distributional lags (ARDL) was used to estimate the long-term relationship of the financial corruption model. The results show that the elasticity of financial corruption to social capital during the period 1360-1399 is negative and equal to -0.52 percent. This finding confirms the fact that in the long run, by strengthening social capital in the country, the volume of financial corruption would decrease.

Keywords

Social capital

financial corruption

fuzzy

econometric model

Iran economy

Akcay, S. )2002). “Impact of social capital on the corruption: an empirical study”, H.Ü. Đktisadi ve Đdari Bilimler Fakültesi Dergisi, Cilt 20, Sayı 2, 2002, s 217-228.

Arikan, G. (2004). “Fiscal decentralization: a remedy for corruption?”. International Tax and Public Finance 11(2): 175-195.

Banerjee, R (2016). Corruption, Norm Violation and Decay in Social Capital. ZA Discussion Paper No. 9859 March 2016

Bjørnskov, C (2003b). “Corruption and Social Capital - Is there a causal link?”. Paper presented at the European Public Choice Society meeting in Aarhus, April 2003, Denmark.

Bondeli, J.V , Havenvid M. I. , Sæther H .S-(2020). “Corruption in interaction: the role of social capital in private–public relationships”. Journal of Business & Industrial Marketing, Vol. 36 Issue 11: 2098-2110.

Bourdieu, P. (1977). Outline of a Theory of Practice. Cambridge: Cambridge University Press.

Braun, M. (2004). "Inflation, inflation variability, and corruption". Economics & Politics, 16 (1): 77-100.

Coleman, J. S (1997) Family, School, and Social Capital, in L. J. Saha (Ed.), International Encyclopedia of the Sociology of Education. Oxford: Pergamon.

D’Agostino, M. J (2006). Social Capital: Lessons from a Service-Learning Program. John Jay College of Criminal Justice. PARK University International Center for Civic Engagement.

De Graaf, G. (2007). ”Causes of corruption: towards a contextual theory of corruption”. Public Administration Quarterly, vol. 31, no. 1: 39-86

de Mello, L. and Barenstein, M. (2001). Fiscal Decentralization and Governance: A Cross-country Analysis. International Monetary Fund Working Paper 01/71. Washington, D.C.

De silva, M (2005). Contextual and Composition: Social capital and maternal health in low-income countries. Thesis Submitted for the degree of Doctor of Philosophy. Faculty of medicine, University of London.

Fisman, R. and Gatti, R. (2002). “Decentralization and Corruption: Evidence Across Countries”. Journal of Public Economics, 83:325-435.

Getz, K.A., Volkema, R.J. (2001). “Culture, Perceived Corruption and Economics: Model of Predictors and Outcomes”. Business and Society, 40(1): 7-30

Glaeser, Edward L (2001). The Formation of Social Capital, Organization for Economic Co-operation and Development, www.oecd.org/dataoecd/5/17/1824983.pdf.

Hanifan, L.J (1996). “The rural school community cente”r. The Annals of the American Academy of Political and Social Science, Vol. 67, No. 1: 130–138

Harpham, T, Grant, E, Thomas, E (2002). “Measuring Social Capital within Health Surveys: key Issues”, Research Report. Health policy and Planning 17, Oxford University press.

Huther, J. and Shah, A. (1998). Applying a Simple Measure of Good Governance to the Debate on Fiscal Decentralization. World Bank Policy Research, Working Paper 1894, World Bank: Washington, DC

Jain, A. K. (Ed.), (1998). The political economy of corruption, Routledge. Vol. 2

Khan, F N and Muhammad Tariq M (2018). “Does Social Capital Greases or Sands the Wheels of Corruption: A Panel Data Analysis”. FWU Journal of Social Sciences, Vol.12, No.2: 160-178

Kyria, A. P., and Roca-S,O (2011). “Fiscal Decentralization and Government Quality in the OECD”. Economics Letters, 111: 191-193.

Lederman, D., Loayza, N. and Soares, R. (2005). “Accountability and corruption: political institutions matter”. Economics and Politics, 17(1), 1–35.

Lin, N. (2001). Social Capital: A Theory of Social Structure and Action .Cambridge University Press.

López, J.P , Santos, J,S, (2014). “Does Corruption Have Social Roots? The Role of Culture and Social Capital”, Journal of Business Ethics. vol. 122(4):s 697-708.

Mauro, P. (1998). “Corruption and growth”. Quarterly Journal of Economics CX (3), 681–712

Mbaku, J. M. (2008). “Corruption cleanups in Africa: Lessons from public choice theory”. Journal of Asian and African Studies, 43 (4): 427-456

Putnam, R.D (2000). Bowling alone: The collapse and revival of American community. New York: Simon & Schuster.

Svendsen, G.T. (2003b). “Social Capital, Corruption and Economic Growth: Eastern and Western Europe”. Department of Economics Aarhus School of Business, Working Paper 03-21, ISSN 1397-4831.

Svensson, J. (2005). “Eight questions about corruption”. The Journal of Economic Perspectives, 19 (3): 19-42.

Treisman, D. (2000). "The causes of corruption: a cross-national study”. Journal of public economics, 76 (3): 399-457.

Uslaner, E. (2004). “Trust and Corruption”. In Corruption and the New Institutional Economics J. G. Lambsdorf, M.s Taube, and M. Schramm (eds.). London: Routledge.

Widmalm, S. (2008). Decentralization, Corruption and Social Capital: From India to the West. Published by VivekMehra for SAGE Publications India Pvt Ltd, Delhi and printed at Chaman Enterprises, New Delhi.

Wike, R. (2008). Where Trust is High, Crime and Corruption Are Low. Pew Global Attitudes Project, Pew Research Center Publication.