More democratic and open systems of government are generally assumed to contain corruption. Subsequent to the end of the communist system in 1990, Mongolia has established a democratic regime, and has been assessed as being relatively well governed. However, more recently, corruption has been worsening, despite the continuation of a democratic regime. This article inquires into the drivers of corruption and into the reasons for why accountability has not been more effective despite a democratic form of government. The availability of three major forms of rents-foreign aid, privatisation and natural resource extraction-is discussed as important drivers. The recent mining boom appears to have reinforced weaknesses in Mongolia's system of accountability. Underlying weaknesses include certain communist legacies, especially of intransparent government and of a 'dependent' judicial system, and substantially increased inequality as a result of transition. Copyright (c) 2007 John Wiley & Sons, Ltd.