Corruption continues to be a problem, while anti-corruption reforms have stalled. Although much work has been done on the causes and consequences of corruption they are yet to lead to significant reductions in corruption around the world. In response to such findings, I suggest disaggregating corruption and acknowledging that grand and petty corruption are not only different in terms of their level, but are substantively different in terms of their nature, causes and impact. The types of corruption have different negative effects and are remedied by different mechanisms. This dissertation makes theoretical, empirical and practical contributions to the field of comparative politics. I incorporate rational choice perspective to explain the differences between grand and petty corruption. I also develop new measures of grand and petty corruption and construct a panel dataset. The second chapter of this dissertation explains the differences between grand and petty corruption and introduces the dataset. The subsequent chapters apply the typology to the problems of democratic and economic development. In particular, I show their substantive differences in the analysis whether improvements in democratic institutions help reduce corruption or not. Grand corruption remains resilient even in more democratic countries; however, petty corruption can be almost eliminated. Then, to address the substantive differences, I employ the typology of corruption to the question whether democracy is a useful tool to reduce corruption. Next, I analyze which type of corruption is more detrimental for economic development and what can be done to ameliorate the harm. Grand corruption is more harmful, however predictability of corruption can work as a constraining factor in certain contexts. The final chapter concludes with the summary of the findings, limitations, and suggestions for future research, which include causal analysis of anti-corruption reforms given the differences in approaches to grand and petty corruption. Ultimately, knowing the nature of corruption and the contexts within which it operates is instrumental for planning the reforms and succeeding.

The main purpose of this essay is to examine the effect of budget transparency on petty and grand corruption. To highlight the differences between the two measurements of corruption, and their relationship with budget transparency, the study will also make a comparison to a broader measurement of corruption. The research question for this essay is: Does budget transparency affect grand and petty corruption differently? Regression analysis is used to examine the relationship between budget transparency and corruption. The regressions are based on cross-section data from close to a hundred countries from all regions of the world. It is widely recognised that corruption is a difficult concept to measure. However, the study does find some interesting results. The initial bivariate regressions indicate that budget transparency is associated with lower levels of both petty and grand corruption, these are however not statistically significant. When controlling for democracy the coefficient for budget transparency is statistically significant for grand corruption, but not for petty corruption. The results also indicate that budget transparency generally has a stronger negative effect on grand corruption compared to petty corruption.