Institutional strength and perceived corruption in Mexico and Peru

This paper examines the effects of the strength of a countrys institutions on its citizens perceptions about corruption. We examine how four institutional pillars -- a countrys economic climate, legal system, physical infrastructure, and public safety -- influence how people perceive corruption in two Latin American countries. People who perceive their countrys institutional environment to be weak, we argue, will perceive great corruption in their country. Results partially supported our hypotheses that a weak institutional environment is related to greater perceived corruption. Among individuals from Mexico and Peru, the weaker the physical infrastructure (H3) and the weaker the public safety (H4), the greater people perceived corruption to be. Key Words: Corruption; institutions; institutional theory; international business; Latin America