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Corruption and public service motivation: Evidence from South Korea

Hyunkuk Lee, JungHo Park, Tobin Im, Jesse W. Campbell

Abstract:

This study examines alternative theoretical models of individual corruption in public

organizations. Based on the rational actor model, it is proposed that public servants may exploit

their advantageous position vis-à-vis their public and political principles for personal gain to the

extent that they are unsatisfied with their pay or perceive their workplace to be unfair in its

dealings with employees. Alternatively, this study also examines the role of public service

motivation (PSM) in reducing corruption. Findings from an analysis based on a representative

survey of civil servants in South Korea suggest that PSM is both related to lower levels of

corruptibility, as well as potentially acts as a buffering mechanism against the effects of

dissatisfaction with pay on corrupt behavior. A discussion of the contribution of this study to

motivation theory in public organizations as well as its practical implications is provided.

Introduction

A great deal of literature has examined the theme of corruption based on its close relationship

with governmental transparency, economic growth, citizens’ trust and confidence in government

and performance, and effective policy implementation (Caiden & Caiden, 1977; Dean, 1977;

Klitgaard, 1997; Mo, 2001; Quah, 1999; Van Ryzin, 2011). Although there have been numerous

theoretical discussions about the root of corruption in the public sector, much emphasis has been

placed on social and institutional antecedents. As such, policy advice to reduce corruption often

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target factors “beyond the individual” by stressing the importance of cultural conditions and the

structure of organizations as the systematic drivers of corruption (de Graaf & Huberts, 2008). For

example, previous studies point to cultural characteristics, economic conditions, and civil service

systems as the primary antecedents of corruption. These explanations of corruption, which

emphasize the cultural and institutional context of corrupt acts, have resulted in cynicism with

regard to the possibility of establishing rigorous causal foundations that can serve as levers for

the reduction of corrupt behavior (Klitgaard, 1997; Rubin & Whitford, 2008; Segal, 2002).

This study takes a different approach to examining corruption in the public sector by focusing on

individual motivation. In particular, public service motivation (PSM), which captures an

individual’s prosocial and altruistic orientation and is generally understood as a predisposition to

respond to values uniquely grounded in public sector organizations (Perry and Wise, 1990), may

represent an alternative approach to corruption in the public sector that can provide insight into

how individual differences interact with organizational phenomena in order to moderate

intentions to act in organizationally deviant ways. PSM has been connected to a substantial

number of behaviors and attitudes recognized as valuable to public organizations (Houston, 2006;

Vandenabeele, 2009; Im, Campbell, and Jeong, 2013), and this study aims to further this

research by establishing a link between PSM and corruption and testing this link empirically.

This study proceeds as follow. We first review relevant theory in order to conceptualize the

potential link between PSM and corrupt behavior, and further discuss how PSM may provide a

rich and important direction in the study of corruption in the public sector. In addition, we

address other antecedents of corruption such as satisfaction with financial rewards and the

perception of organizational fairness. Based on this analysis, empirical hypotheses are proposed

and tested using data collected from public servants working in central government organizations

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in South Korea. This paper concludes with a theoretical discussion of the results of the analysis,

as well as the implications of this study for policy initiatives aimed at reducing public corruption.

Literature review

Corruption in the public sector

The notion of corruption has numerous meanings and definitions due to its multidimensional

nature and the complex processes underlying its occurrence (Alemann, 2004; Ashforth, Gioia,

Robinson, & Treviño, 2008; de Graaf & Huberts, 2008; Klitgaard, 1988; Kurer, 2005; Rose-

Ackerman, 1999). One of most widely cited definitions of corruption conceptualizes the

phenomenon as individual behavior “which deviates from the formal duties of a public role

because of private-regarding (personal, close family, private clique) pecuniary or status-gains; or

violates rules against the exercise of certain types of private-regarding behavior” (Klitgaard,

1988, p. 23). This definition is not solely constrained to the public sector corruption, but is

broadly applicable to other social sectors. Specifically regarding the corruption of public officials,

de Graaf and Hubert (2008) write that “public officials are corrupt when they act (or fail to act)

as a result of receiving personal rewards from interested outside parties.”

In explaining how and why corruption arises in the public sector, Klitgaard (1988) suggests an

appealing explanation based on the principle-agent-client framework. In his distinguished

research, Klitgaard (1988) argues that public officials tend towards misconduct or to deviate

from the rules when an agent (i.e., a public servant) betrays their principal’s (i.e., the public’s)

interests for the purpose of achieving his or her own interest at the expense of principal’s

interests. Such behavior primarily arises due to the divergence or inconsistency of interest

between the principal and agent. Put simply, M. W. Collier (2002) states that corruption happens

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when public servants abuse the power vested in their public office for self-interest. These studies

commonly point out that public servants’ corruption, at the individual level, occurs when public

officials mobilize their discretion and power for the purpose of their own self-interest (e.g.,

social status or financial reward).

Previous literature has pointed to diverse antecedents of corruption (Beckers & Stigler, 1974;

Rauch & Evans, 2000; Rose-Ackerman, 1999; Rubin & Whitford, 2008; Van Rijckeghem &

Weder, 2001). In particular, as corrupt behavior is usually undertaken for personal gain, wage

levels and satisfaction with financial rewards have drawn extensive attention in the literature.

Very simply, the less satisfied public servants are with their financial rewards, the more likely

they may be to engage in corrupt acts in order to supplement their salary, often though accepting

bribes. Empirical evidence largely supports this theory. For instance, Van Rijckeghem and

Weder (2001), using cross national data, compared the wage level of civil servants with

employees in the manufacturing industries, and found that wage has an inverse relation to

corruption in both sectors. At its base, this driver of corruption is related to an absolute

evaluation of a given employee’s ratio of inputs (efforts, skills, etc.) to outputs (remuneration).

A second connection between satisfaction with financial rewards and corrupt behavior can be

found in classical equity theory (Adams, 1963). According to equity theory, individuals are

aware not only of their own ratio of input to output, but also that of other individuals. As such, in

addition to an absolute evaluation of personal utility, equity theory suggests that relative,

interpersonal evaluations of utility are also important (Akerlof and Yellen, 1990). In terms of

corrupt behavior, individuals who perceive that they are not well compensated relative to others

with comparable skills and work may take actions to close the gap. This can be done either

through reducing personal effort, or alternatively, engaging in corrupt behavior.

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Questions of equity are closely linked with broader views of organizational fairness. Particularly

with regard to treatment by management and organizational rewards, if individuals have an

ongoing sense that their organization is unfair, their sense of moral outrage may be dulled when

presented with the opportunity to engage in a corrupt act for personal gain (Rose-Ackerman,

1975). In this vein, Kurer (2005) also argues that corruption is fundamentally related to the

principle of impartiality, i.e. that “corruption is deeply rooted in perceived distributive justice

and therefore, that corruption emerges whenever there is a problem with the fairness of resource

distribution” (p.165). Put simply, public servants who perceive their rewards (i.e., wages and

promotion) are fairly based on their own performance may view their organization itself as fair

(Rauch & Evans, 2000). On the other hand, organizational fairness is not limited to questions of

distributive equity but is rather a general perception about the organization as such, and is closely

related to the concept of justice. These general perceptions of the organization can function as

cognitive heuristics that shape the decision to engage in various kinds of behavior, and

perceptions of fairness have been connected with various forms of employee misconduct

(Treviño and Weaver, 2001; De Schrijver et al., 2010).

Based on the above discussion, the following two hypotheses are proposed.

Hypothesis 1: Dissatisfaction with pay is positively related to corruption.

Hypothesis 2: Perceived unfair treatment is positively related to corruption.

The role of public service motivation

The two hypotheses proposed above are rooted in an understanding of human beings as

fundamentally motivated by self-interest and driven to maximize personal utility by exploiting

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their relative advantages in the principle-agent framework (Mahler & Regan, 2005; Mueller,

2003). In this framework, a public servant, as an agent, tends to take advantage of given

conditions (e.g., information asymmetry) to further their self-interest. This stream of thought has

served as a cornerstone for many ongoing government reform initiatives. From a popular

perspective, “extrinsic rewards and punishments are the primary sources of work motivation may

underlie the popular perception of the lazy bureaucrat” (Frank & Lewis, 2004, p. 39).

On the other hand, contrary to this view of public servants as purely “homo economicus”

(Andersen, 2009, p. 83), early theorists of public sector work motivation argue that public

servants instead place a high value of public service per se, and relatively less emphasis on

financial rewards (Rainey, 1983). Rainey (1983) specifically found that public servants value

“the meaning of work” and “engagement in public service” (p. 293) more than financial rewards,

drawing attention to a potentially distinguishing aspect of civil service careers and motivation. In

a similar vein, Frederickson and Hart (1985) asserted that significant reasons why people enter

the public service include feelings of patriotism and commitment to democratic values, as well as

a genuine love of the people.

The concept of PSM (Perry and Wise, 1990), defined as “an individual’s orientation to delivering

services to people with a purpose to do good for others and society” (Perry & Hondeghem, 2008,

p. vii), captures these tendencies. Empirically, PSM has been linked with a number of positive

organizational attitudes and behaviors, including organizational commitment (Ritz, 2009;

Vandenabeele, 2009; Im et al., 2013), organizational citizenship behavior (S. M. Kim, 2006;

Pandey, Wright, & Moynihan, 2008), individual performance (Leisink & Steijn, 2009;

Vandenabeele, 2009), turnover intention (Bright, 2008; Campbell, Im, and Jeong, 2014), job

satisfaction (Taylor, 2008; Vandenabeele, 2009), prosocial behavior (Houston, 2006), and

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whistle blowing (Brewer & Selden, 1998). Furthering these studies, this research links PSM with

reduced intentions to engage in corrupt behavior.

PSM is linked with placing a greater value on the meaning of public service per se as opposed to

financial rewards, and public interest than personal gains. More directly, Brewer and Selden

(1998) provide evidence that PSM has a substantial association with an important component of

public service ethics, namely, the tendency to report corruption. Rubin and Whitford (2008) also

emphasized the need for future research to address the relationship between individuals’ public

service motivation (PSM) and corruption, arguing that the constructs may be closely linked.

These considerations lead to the following hypothesis.

Hypothesis 3: PSM is negatively related to corruption.

In addition to this direct effect of PSM on corruption, however, this study also examines the

extent to which PSM may also act as a buffer against the effects of low satisfaction with pay and

the perception of unfairness on corruption. Firstly, in addition to less concern with extrinsic

rewards, PSM is closely connected with self-sacrifice (Perry and Wise 1990). As such, other

things being equal, higher levels of PSM may be associated with greater acceptance of low

wages. Alternatively, it may be the case that PSM driven employees also view low wages as

directly contributing to the public good by making better use of the public’s resources. In terms

of relative deprivation and perceived unfairness in the organization, while such factors may

affect employees with high levels of PSM a great deal, nevertheless PSM may motivate

employees to address these factors differently, such as through voice or, in the extreme case,

whistle blowing (Brewer & Selden, 1998), rather than engaging in corruption themselves.

Secondly and more generally, employees with higher levels of PSM have been connected with

higher levels of resiliency against potentially negative effects of many public bureaucracies, such

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as red tape (Scott and Pandey, 2005) and a strong emphasis on internal efficiency (Campbell et al.

2014).

The following two hypotheses are proposed.

Hypothesis 4: PSM negatively moderates the relationship between dissatisfaction with pay

and corruption such that at high levels of PSM, the relationship between dissatisfaction

with pay and corruption is weaker.

Hypothesis 5: PSM negatively moderates the relationship between perceived unfair

treatment and corruption such that at high levels of PSM, the relationship between

perceived unfair treatment and corruption is weaker.

Based on the principle-agent model of corruption as explained by Klitgaard (1988), this study

controls for both employee discretion and merit pay in order to test the hypotheses outlined

above. Discretion entails that civil servants may use their own judgment in place of formal

organizational policy in making decisions about how to allocate their time and resources. As

such, higher levels of discretion in the civil service may provide the opportunity to engage in

corrupt acts. Secondly, merit or performance based pay, along with increased discretion for

public servants, is a central tenant of New Public Management (NPM) reform initiatives (Hood

and Peters, 2004), and as such is a highly relevant construct for public organizations. Merit pay

may be important for the reduction of corruption as it provides civil servants with an alternative

and legitimate behavior, namely, increased effort, with which to counter the effects of

dissatisfaction with pay. Moreover, merit pay may also be closely connected with perceptions of

distributive equity, whose relationship to corruption has already been discussed.

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Data, research context, and measurements

Data

This research uses data from The Korean Civil Service Survey (KCSS), which was conducted by

the Knowledge Center for Public Administration & Policy at Seoul National University. The

survey was conducted between June 7, 2011 and July 18, 2011, and a total of 1,320 observations

were collected from public servants working in central government ministries. Quotas of 30, 40,

or 50 respondents were selected for departments based on their relative size, and respondents

from each department were selected randomly from employee lists. Surveys were administered

through face-to-face interviews by professionals from a survey company in Korea.

Corruption in South Korea's public service

South Korea’s challenges with and efforts to overcome corruption in government make the

country an interesting context in which to explore the propositions outlined in the previous

sections. Beginning in the 1960s, Korea embarked on a process of rapid industrial development

that has resulted in the transformation of the country from one of the world’s poorest to one of its

richest. This remarkable success, however, has came at a significant cost in terms of money

politics and corrupt government practices (Kang, 2002), and today the government continues to

battle corruption resulting from the close relationship between government and business that was

a key component of the state’s development strategy (Rho and Lee, 2010). For example, Korea’s

rank on both Transparency International’s Corruption Perception Index (CPI) as well as the

Bribe Payer Index (BPI) are low relative to other countries of comparable economic

development and sophistication (for example, Korea was ranked 22nd out of 30 members of

Organization for Economic Cooperation and Development (OECD) group in 2012). On the other

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hand, due to significant efforts to address corruption in government over the past decades,

consistent progress has been made to improve the situation (Lee & Jung, 2010). Korea’s current

strategy for reducing corruption in the public sector includes the founding of nationwide

anticorruption institutions such as the Anticorruption Act of 2001 and the establishment of the

Korea Independent Commission Against Corruption (KICAC), political and campaign finance

reforms, as well as a robust e-procurement system. In addition, various civil society

organizations as well as international organizations, such as the OECD, have also played a role.

Nevertheless, tendencies toward corruption are embedded deeply in Korea’s organizational and

social culture. For example, certain cultural traditions in Korea have often been abused as a way

of giving and taking bribes, particularly money gifts associated with social occasions such as

weddings and funerals. While systems such as Korea’s e-procurement framework have brought

significant transparency to a wide range of government transactions with the private sector, such

cultural institutions continue to provide cover for a range of corrupt behaviors (Ko & Cho, 2011).

This issue is addressed further in the following section dealing with the measurement of

corruption used in this study.

Measurements

Due to its sensitive and secretive nature, corruption is a difficult construct to measure. Generally

in the social sciences, objective measures are preferred to perceptual ones, however in the case of

corruption such data can only be collected in the case that corruption is uncovered, and therefore

should also be considered only an estimate of the true level of corruption in a given organization

or state. In this study, the likelihood of corruption is measured by focusing on public servants’

moral sensitivity to corrupt acts based on the assumption that the less morally sensitive public

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servants are towards acts of corruption, the more likely they will be to engage in them. This

‘slippery slope’ line of reasoning is a common approach in the literature on corruption (Degraff,

2008, p.644; Segal, 2002).

To measure the likelihood of corruption, survey participants were asked to rate how corrupt they

viewed different types of behavior to be. The 4 behaviors used were the following:

Accepting 100,000 won (about 100 USD) from a job-related company at your child’s

marriage ceremony.

Accepting a 100,000 won gift certificate from a job-related company.

Making a long distance phone call on an office phone for personal purposes.

Being absent from work for personal purposes.

Officials responded based on a Likert scale ranging from 1 to 5 with 1 representing “It is not

corrupt at all” and 5 representing “It is very corrupt.” To calculate the likelihood of corruption, 5,

which represents perceptions of obvious corruption, was transferred to zero as we assume that

respondents who choose 5 have a very small possibility of corrupt behavior. A value of 1, which

indicates that the respondent judges the act to be completely non-corrupt, is transferred to 100,

again on the assumption that respondents who choose 5 have high a possibility of corrupt

behavior. After these transfers, responses across the 4 questions were averaged to produce a

likelihood of corruption scale ranging from 0 to 100. The scale was found to be internally

consistent, with a Cronbach’s alpha coefficient of .818.

This measure of corruption is particularly suited for the Korean context. As Kwon (2012) notes,

accepting 100,000 won from a job-related company, understood as a business that stands to

benefit from the implementation of favorable regulation or subsidies, is considered formally to

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be corrupt behavior. The second two questions do not measure formally corrupt behavior as

defined by the Public Service Ethics Law (am I right here?). However, they do represent a type

of breach of trust on the part of public servants. While these questions moreover do not address

large-scale corruption, however, the types of petty corruption captured by the items are

applicable for civil servants at all levels.

Dissatisfaction with pay and perceived unfair treatment were each measured with a single item,

both of which were reverse coded: “I am satisfied with my pay” and “This organization treats all

employees fairly.” In order to measure relatively complex constructs such as satisfaction and

perceived fairness (Heneman and Schwab, 1985; Colquitt, 2001), multi-item measurements are

generally preferred. As such, the use of single item measures for critical variables in this study

represents one of its limitations. That said, both questions are unambiguously worded, and each

has a high face validity for the respective concept being measured. Respondents answered on a

5-point Likert scale which was reverse coded from 1 (strongly agree) to 5 (strongly disagree).

Thus, higher values are associated with greater levels of dissatisfaction with pay and higher

perceived unfair treatment.

Public service motivation is measured by 5 items based on Perry’s (1997) 24-item scale. The

items are drawn from three core dimensions of PSM: commitment to the public interest,

compassion, and self-sacrifice. The following questions were used: “I consider public service my

civic duty,” “Meaningful public service is very important to me,” “Most social programs are too

vital to do without,” “I am one of those people who would risk personal loss to help someone

else,” and “Making a difference in society means more to me than personal achievements.”

The final composite scale ranges was created by averaging answers across the five questions, and

thus runs from 1 (low PSM) to 5 (high PSM). Cronbach’s alpha for the PSM scale was .863.

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Both merit pay and discretion were each measured using a single question, “In my organization,

pay is based on employee performance” and “In my organization, employees have significant

discretion in performing their jobs.” Again, these single item measurements potentially represent

limitations for this research, though the caveats offered above in relation to dissatisfaction with

pay and perceived organizational fairness may also apply in this case.

A number of demographic controls are also included in our model of corruption likelihood,

including civil service grade, organizational tenure, sex, and age. Demographic factors have in

some cases been linked to misbehavior at work (De Schrijver et al. 2010), and as such may bias

estimates of the variables of interest if omitted from the model.

Findings

Descriptive statistics and correlations

Table 1 presents the descriptive statistics for the variables used in this study. The likelihood of

corruption scale ranges 0 to 100 and has a mean value of 36.7. This statistic is below the scale

midpoint, and suggests that public servants are not excessively insensitive to corrupt behavior.

Table 1: Summary statistics

[Table 1 about here]

PSM shows a mean value of 3.5, which is above the scale midpoint, suggesting that public

servants are significantly motivated by intrinsic concerns. Dissatisfaction with pay, however, is

also above the scale midpoint, with a mean value of 3.2. Encouragingly, unfair treatment, on the

other hand, has a mean value below the scale midpoint at 2.4.

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Table 2 shows inter-construct zero-order correlations. As can be seen, PSM is negatively related

to the likelihood of corruption, which is consistent with the hypothesis proposed in this study.

Moreover, both dissatisfaction with pay and unfair treatment are positively associated with

corruption, also in line with the hypotheses presented above. Merit pay is also negatively related

to the likelihood of corruption, while discretion shows no statistically significant relationship. Of

the demographic controls, both age and organizational tenure show negative relationships with

the dependent variable.

Table 2: Zero-order correlations


Principle findings

Table 3 displays the results of the principle analysis of this study. Model 1 shows the direct

effects of PSM, dissatisfaction with pay, unfair treatment, and control variables and the

likelihood of corruption. Both dissatisfaction with pay and perceived unfair treatment show

statistically significant, positive relationships with the dependent variable (1.317 p < .05 and

2.067 p < .01, respectively). These findings provide support for hypotheses 1 and 2 of this study

which stated that dissatisfaction with pay and unfair treatment are associated with a higher

likelihood of corruption in public organizations. Hypothesis 3 stated that PSM would be

negatively associated with the likelihood of corruption. The findings of model 1 again provide

support for this hypothesis. Of the 3 main variables of interest in study, moreover, PSM was

found to have the strongest effect, with a regression coefficient of -6.484 (p < .001). Merit pay

was also found to be negatively related to the likelihood of corruption, while employee discretion

was not found to have any statistically significant effect.

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Table 3: Regression analysis


Of the demographic control variables, only sex appears to be related to the likelihood of

corruption in Korean public organizations. The results suggest that females have a significantly

stronger moral sensitivity to corruption and thereby may be less likely to engage in corrupt acts.

Indeed, the strength of sex in the model is second only to the effect of PSM with the regression

coefficient -4.625 (p < .001).

To test for the moderating effects of PSM on dissatisfaction with paid and unfair treatment,

procedures outlined by a number of prominent methodologists were followed (Aiken & West,

1991; Cohen & Cohen, 1983; Simons & Peterson, 2000). First, interaction variables were created

by taking the product of PSM and both dissatisfaction with pay and unfair treatment, respectively.

Secondly, these variables were added to the model in a hierarchical fashion, which reduces

multicollinearity problems resulting from the use of multiplicative terms. The results of this

analysis are displayed in the table 1 under the heading Model 2.

Hypothesis 4 stated that PSM would negatively moderate the relationship between dissatisfaction

with pay and the likelihood of corruption. The results of the analysis suggest support for this

hypothesis based on the negative and statistically significant coefficient of the interaction term.

Similarly, hypothesis 5 stated that PSM would also negatively moderate the effect of perceived

unfair treatment on the likelihood of corruption. However, while the interaction term in the

model is statistically significant, it is positive rather than negative, which suggests that the

hypothesis should be rejected.

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To further aid in the interpretation of the results, the interactions uncovered in model 2 were

graphed. The graphs show the slope of the relationship between the independent variable of

interest and the likelihood of corruption at high and low levels of PSM (1 standard deviation

above and below the mean, respectively) while holding all other independent variables constant

at their means. The first graph shows the relationship between dissatisfaction with pay and the

dependent variable at the specified levels of PSM. As can be seen in the graph, at low levels of

PSM the relationship between dissatisfaction with pay and corruption is positive. In other words,

employees who report low levels of PSM are more likely to engage in corrupt behavior to the

extent that they are also dissatisfied with their pay (hypothesis 4). The second graph tells a

different story. Here, at low levels of PSM the slope of the relationship between perceived

unfairness and the likelihood of corruption is close to zero. This suggests that employees with

low levels of PSM are not more likely to engage in corrupt behavior as perception of unfairness

increases. On the other hand, perceived organizational unfairness does appear to be an operative

factor determining corrupt behavior for employees who report high levels of PSM. This finding

is consistent with the results displayed in table 3, and is against hypothesis 5 of this study. The

next section provides a discussion of these results and offers some interpretations of this

interesting finding.

Figure 1: Moderation graphs

[Figure 1 about here]

Discussion: Reducing the likelihood of corruption in public organizations

Corruption in the public sector negatively impacts organizations performance and trust in

government. This study explored the effects of a number of employee level perceptions on the

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likelihood of corruption on the part of public servants. While many of the causes of corruption

are systemic, nevertheless it is individual public servants who engage in corrupt acts (Caiden &

Caiden, 1977), and as such understanding the empirical antecedents of corrupt behavior is an

important task for public administration research. Based on the rational actor model, it is argued

that public servants tend to exploit opportunities to increase their own interest when

environmental conditions are favorable to do so (Palmier, 1985). As such, many government

agencies have attempted to reduce corruption by designing new legal and institutional devices,

providing the specified administrative procedures and criteria for corruption, and spending more

resources on monitoring and policing for corruption. However, public servants may become

skilled at meeting these formal criteria, which may moreover be irrelevant in different situations,

or lab behind changing social and environmental conditions (c.f., Segal’s inaction case) (Zajac,

1996). For example, Segal’s case study (2002) suggests that even with stricter policy measures

for corruption—replacing public personnel, providing reporting and multiples processes of

auditing systems—individuals can elude such efforts by taking numerous strategic approaches

(i.e., co-optation, coalition). As such, relying solely on external policing and punishing to

eliminate corruption in the public sector has significant limitations.

Given that external controls for corruption cannot eliminate entirely opportunities for engaging

in corrupt behavior, examining factors which increase the likelihood that public servants will

engage in corrupt acts is an important research task. This study hypothesized that both

dissatisfaction with pay and perceived organizational unfairness would be positively related to

the likelihood of corruption, hypotheses which the empirical analysis support. The links between

satisfaction with pay, organizational fairness and corruption are well documented in the extant

literature, and this study provides additional evidence of their importance. Employees who are

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unsatisfied with their pay may perceive a gap between their worth and their rewards, and as such

may take action to close this gap, either through reducing their effort or attempting to supplement

their pay through corrupt acts. This intuitive link, moreover, has been recognized by various

public sectors around the world (for example, in Singapore), and has resulted in attempts to bring

public sector pay in line with that of the private sector. Closing the gap between public and

private sector pay has also been a goal of public sector reform in Korea, which has also

introduced various performance-based incentives designed to encourage civil servants to apply

themselves fully (Park and Joo, 2010). The findings of this study lend weight to the arguments

that such measures may be effective reducing corruption.

This study also found a positive relationship between perceived organizational unfairness and the

likelihood of corruption. While perceived unfairness may be closely related to dissatisfaction

with pay, nevertheless unfairness captures a broader concept which may be related not only to

distributive but also other kinds of organizational justice, such as having sound and fair

procedures to resolve conflicts between employees and management. This study argued that

employees who perceive that they are treated unfairly by their organizations may be more

susceptible to corrupt acts, feeling that their loyalty to and effort on behalf of the organization

are not reciprocated. While these underlying mechanisms were not directly tested in this study

and thus remain for future research, nevertheless the results of the analysis suggest that efforts to

improve perceptions of fairness in public organizations may reduce employee intentions to

engage in corrupt behavior. This is an important result, as it represents a managerial mechanism

which may be employed with relatively less resistance than increasing employee pay. As such,

the practical implications of this findings are highly relevant for public managers.

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The role of public service motivation

In addition to dissatisfaction with pay and perceived unfairness, this study also tested whether

higher levels of PSM are associated with reduced likelihood of corrupt behavior. The results of

the analysis largely support this contention. In past studies, PSM has been connected with a wide

variety of positive dispositions and behaviors in public organizations, including a higher

likelihood to report corruption (Brewer and Selden 1998). PSM is associated with self-sacrifice

and a high level of commitment to the goals of public organizations (Perry and Wise, 1990), as

well as stronger belief in mission valence (Wright, Moynihan, and Pandey, 2012). This study

also suggested that PSM may also be associated with a greater acceptance of low pay based on

the perception that reduced compensation may contribute directly to the public good by freeing

up funds for more important purposes. This finding alone represents a significant contribution to

the public sector literature focusing on organizational behavior, and potentially points to

important practical implications in the reduction of corruption.

In addition to this direct effect, however, this study also examined whether PSM could act as a

buffering mechanism against negative job perceptions. The results of the analysis provide mixed

support for these hypotheses. On the one hand, as hypothesized, PSM was found to have a

negative moderating effect on the relationship between dissatisfaction with pay and the

likelihood of corruption. The positive attitudes of high-level PSM employees, such as self-

sacrifice, may encourage them to maintain a high level of work motivation as well as an ethical

outlook even in instances where they feel they are being compensated materially below their

worth. In contrast to the rational actor model of organizational behavior, moreover, it may be the

case that, due to this intrinsic motivation, employees motivated strongly by PSM may also have

stronger internal regulations which protect them from temptations to engage in corrupt behavior

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20

in the absence of external controls. Scholars have also argued that PSM is associated with

resilience in the face of the type of bureaucratic characteristics associated with public

organizations (Scott and Pandey, 2005). This finding extends this research by linking PSM with

relatively lower intentions to engage in highly damaging type of organizational behavior.

Based on a similar line of argument, this study also tested whether PSM reduced intentions to

engage in corrupt behavior in organizations with higher levels of perceived unfairness. In this

case, however, the results of the analysis did not confirm the hypothesis. Surprisingly, higher

levels of PSM were associated with a greater likelihood of corruption in cases where

organizations were perceived to be less fair. In contrast to satisfaction with pay, perceived

organizational unfairness relates to a more general perception about the organization and how it

treats its members. While levels of satisfaction with pay appear to be unrelated to the likelihood

of high level PSM employees to engage in corrupt acts, these same employees may be more

sensitive to general evaluations of justice. Given the strong public-orientation of employees

motivated by PSM, this result may not be as remarkable as it first appears. In any case, the

results suggest that perceived fairness in public organizations may have an important relationship

with PSM which may be explored in future studies. Unfortunately, doing so to any satisfactory

degree is beyond the scope of this research.

Conclusion

This study tested a number of empirical hypotheses related to the likelihood of corruption in

public organizations. The findings indicate that PSM is not only related to lower levels of

corruption, but also that it may act as a buffering mechanism against the effects of low

satisfaction with pay. This finding extends the theory of PSM, as well as further underscoring the

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practical importance of cultivating intrinsically motivated employees in the public sector.

Against our expectations, however, the analysis also suggests that PSM may be associated with a

higher likelihood of corruption in organizations that are perceived to be unfair by employees

with high levels of PSM. This higher sensitivity to the ethical climate of public organizations is

in line with the public-oriented dimensions of PSM, though further study is needed in order to

fully understand this result.

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Tables and figures

Table 1: Summary statistics

Variable Mean SD Min Max

Likelihood of corruption 36.7 18.9 0 100

Public Service Motivation (PSM) 3.5 0.6 1 5

Dissatisfaction with pay 3.2 0.9 1 5

Unfair treatment 2.4 0.8 1 5

Merit

pay 2.7 0.9 1 5Discretion 3.0 0.7 1 5

Service grade 4.3 1.3 1 7

Organizational tenure 13.8 8.5 0.1 40.3

Female 0.3 0.4 0 1

Age 40.4 7.4 23 59

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Table 2: Zero-order correlations

1 2 3 4

1 Likelihood of corruption

2 Public Service Motivation (PSM) -.240***

3 Dissatisfaction with pay .138*** -.247***

4 Unfair treatment .172*** -.335*** .252***

5 Merit pay -.143*** .246*** -.205*** -.201***

6 Discretion -.040 .166*** -.163*** -.214***

7 Service grade -.025 .174*** -.059* -.015

8 Organizational

tenure

-.049

.252***

-.252***

-.071*

9 Female -.018 -.247*** .032 .114***

10 Age -.069* .293*** -.220*** -.081**

6 7 8 9

7 Service grade .053

8 Organizational tenure -.064* .357***

9 Female -.003 -.299*** -.226***

10 Age

-.018

.473***

.877***

-.362***

* p<0.05, ** p<0.01, *** p<0.001

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Table 3: Regression analysis

Model

1:

Without

interactions Model

2:

With

interactions

Dissatisfaction with pay 1.317 (0.637)* 8.505 (3.491)*

Unfair treatment 2.067 (0.662)** -7.854 (3.417)*

Public Service Motivation (PSM) -6.484 (0.983)*** -6.836 (3.285)*

PSM x Dissatisfaction with pay -2.035 (0.956)*

PSM x Unfair treatment 2.860 (0.963)**

Merit pay -1.795 (0.597)** -1.747 (0.596)**

Discretion

1.197

(0.737)

1.161

(0.735)

Service grade 0.246 (0.463) 0.218 (0.462)

Tenure 0.240 (0.130) 0.236 (0.130)

Female -4.625 (1.305)*** -4.633 (1.301)***

Age -0.299 (0.160) -0.290 (0.160)

Intercept 60.428 (6.880)*** 61.239 (13.245)***

R-squared .088 .095

Adj.

R-squared .081 .087

N 1281 1281

* p<0.05, ** p<0.01, *** p<0.001

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Figure 1: Moderation graphs

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