Do High Levels of Economic and Political Freedom Cause Less Corruption?

52 Pages Posted: 25 Jan 2014 Last revised: 4 Dec 2014

See all articles by Osmel Brito-Bigott

Osmel Brito-Bigott

DatAnalitica; Francisco Marroquin University; Pontifical Catholic University Madre y Maestra - Economics

Hugo Joaquin Faria

Instituto de Estudios Superiores de Administración (IESA), Finance Center

Daniel R. Morales

Asunto Económico

Hugo Montesinos

Universidad Simón Bolívar (USB)

Date Written: May 22, 2010

Abstract

A growing body of evidence documents numerous and deleterious economic and social consequences of corruption. These findings beg the question: How to reduce corruption? We exploit exogenous sources of variation in latitude, ethno linguistic fractionalization, settler mortality rates, legal origin and initial values of economic and political freedom as instrumental variables for economic freedom and political freedom. We document the existence of a negative, robust, statistically significant and economically consequential impact of economic and political freedom on corruption and both freedoms are complementary. However, “horse race” results suggest that economic freedom trumps political freedom in the effort to deter corruption.

Keywords: Corruption, Economic freedom, Political freedom

JEL Classification: D73, O5, P10, P20

Suggested Citation

Brito-Bigott, Osmel and Faria, Hugo Joaquin and Morales, Daniel R. and Montesinos, Hugo, Do High Levels of Economic and Political Freedom Cause Less Corruption? (May 22, 2010). Available at SSRN: https://ssrn.com/abstract=2382967 or http://dx.doi.org/10.2139/ssrn.2382967

Osmel Brito-Bigott (Contact Author)

DatAnalitica ( email )

Gustavo Mejia Ricart #120
Edificio Las Anas, Local 302
Santo Domingo, 10147
Dominican Republic
+18093781094 (Phone)

HOME PAGE: http://www.datanalitica.com

Francisco Marroquin University ( email )

6 calle final zona 10
Guatemala City, 01010
Guatemala

Pontifical Catholic University Madre y Maestra - Economics ( email )

Santo Domingo
Dominican Republic

Hugo Joaquin Faria

Instituto de Estudios Superiores de Administración (IESA), Finance Center ( email )

Daniel R. Morales

Asunto Económico ( email )

Santo Domingo
Dominican Republic

HOME PAGE: http://www.asuntoeconomico.com

Hugo Montesinos

Universidad Simón Bolívar (USB) ( email )

Sartenejas
Caracas
Venezuela

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