Anti-corruption agencies have emerged during the past decades as a recurrent institutional feature of a majority of world states. The rapid spread of these agencies is matched by a specialized literature that remains largely silent on a host of interesting questions. One of these questions that we address here refers to why we would ever expect a government to establish an anti-corruption agency that is effective by allowing it to adequately pursue charges of corruption. Since government actors have higher access to political rents than the rest of the political establishment the incentives should be in place for executives to directly or strategically contain anti-corruption agencies. It follows that overall we should expect these agencies to be largely inefficient and heavily constrained by the government. An equally interesting part of the argument we propose is that we also attempt to model and identify the conditions under which effective anti-corruption agencies might in fact emerge. This can also have relevance for a host of other issues connected to economic policy-making, institutional design or political accountability. In developing our argument we particularly focus on the role that government willingness to attract economic foreign direct investment plays in establishing effective anti-corruption agencies. We resort to a principal-agent framework and we seek to emphasize in a more systematic manner the connections between arguments proposed within the political corruption and the international political economy approaches. We then test the hypotheses emerging from the argument on a cross-national sample of developing and developed countries. We use economic and political data that is widely available through national governments or the databases of international institutions like the United Nations, the World Bank or the European Union.
