A 2004 article from Radio Free Europe covers this topic well:
Is Raising State Salaries Enough To Combat Corruption?
An excerpt:So does that mean that raising state salaries is all it takes to root out corruption?
Actually, no -- far from it. Corruption in the state sector sometimes forms a chain, from the lowest bureaucrat to the most senior ministers, and in this case breaking the cycle is more difficult.
Laurence Cockroft, chairman of Transparency International's British chapter, told RFE/RL: "It's also sometimes part of an organized racket, so that the policeman on the beat may be taking a bribe from the public at the behest of his senior, who may be trying to organize quite a large taking from those more junior policemen whom he controls. So one has to accept the fact that although petty corruption for the most part is a means of survival, that's not always
the case and it's not the whole picture."
At the most senior level, Cockroft said, ministers have access to information and decision-making powers that have the potential to earn them millions of dollars, so doubling or tripling their salaries can have little effect. "If we move up the scale to the level of ministers, then certainly in terms of the developing world, whether we're looking at India or Cameroon or Colombia, the fact of the matter is that ministers are paid a small sum and do find it difficult to survive on those salaries," he said. "On the other hand, the fact of the matter is that in those cases, the means of sustaining or increasing their take-home pay is really to become involved in very large contracts where the distortion of public finances is rather serious and the implications for society as a whole are likewise very serious."
What ultimately makes more of a difference in combating corruption are factors such as the transparency of business rules, laws, freedom of the press, and cultural pressure. The more government officials have the leeway to create rules and regulations as they go along, the easier it is for them to use their discretionary powers for personal gain and the harder it is for the media to act as an effective check against corruption.