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Many researches on corruption examined macro factors such decentralization, political democracy, press freedom, and economic freedom, as shown by Lecuna (2012), Alexeef and Habodazzova, (2012) and Goel and Nelson (2005). However, there are limited studies on corruption that examine this topic from organizational approach. The main purpose of this paper is to investigate existing institutional theories describing corrupt behaviour in Asian public sector organizations. A total of 171 questionnaires were distributed to public service officers who were currently enrolled as accounting postgraduate students in both China and Indonesia. The results support the institutional theoretical model used to explain corruption in public sector organizations. However, cultural differences in democracy was not a significant factor on respondent’s perception concerning corruptions in both of countries.

Institutional theory for explaining corruption: An empirical study on public sector organizations in China and Indonesia