Complex Relationships: Income Inequality, Trust and Corruption

Abstract

The goal of this thesis is to investigate the link between income inequality and corruption and poses the following research question: Is there a positive relationship from income inequality to corruption and is this effect dependent on trust? The thesis attempts to contribute to the small but growing literature on this link by using recent data with a global coverage. In addition to the independent variables, income inequality and trust, relevant control variables were added to the model. For the analysis I use the method of Ordinary Least Squares (OLS). The results are surprising in that they reveal that income inequality has both a positive and negative correlation to corruption, depending on the level of trust. These are interesting results and contradict much of the literature. But as there are several issues concerning the quality and availability of the data, I refer from making strong conclusions. Most importantly, my findings reveal that there is a need for additional investigations into this very interesting topic.