Public Corruption and Public Debt: Some Empirical Evidence
12 Pages Posted: 7 May 2012
Date Written: March 1, 2012
Abstract
Recent theoretical literature related high public debt to the presence of rent-seeking activities by the government (Bataglini and Coate, 2008, Yared, 2010). This paper tests the hypothesis that higher public corruption leads to higher public debt using a panel of OECD countries. The estimates, controlled for the countries' and time fixed effects, support the importance of public corruption in determining country's public debt.
Keywords: public debt, public corruption
JEL Classification: H11, H63
Suggested Citation: Suggested Citation
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