Corruption and Software Piracy: A Comparative Perspective

This article examines the influence of corruption on software piracy across countries. Drawing on a simple theoretical model and a large sample of countries for a recent time period, it addresses three key questions: (i) What are the key determinants of software piracy?; (ii) How do nations with different piracy levels respond differently to factors that affect piracy, especially corruption?; and (iii) Is there a two-way causality between software piracy and corruption? It is demonstrated that corruption levels help explain variations in software piracy across countries, with higher levels of corruption correlating with higher levels of software piracy. However, the influences of different factors (including democracy, economic prosperity, market size and legal factors as well as corruption) are sensitive to prevailing levels of piracy, varying across countries with different piracy rates. Policy implications are discussed; these findings suggest that antipiracy initiatives would need to be fine-tuned to country context, such as existing piracy levels.