Business Regulation and Taxation: Effects on Cross-Country Corruption

Journal of Economic Policy Reform, vol. 15 no.3 pp. 223-242, 2012

Posted: 1 Oct 2014 Last revised: 19 Apr 2016

See all articles by Rajeev K. Goel

Rajeev K. Goel

Illinois State University - Department of Economics

Date Written: 2012

Abstract

This paper adds to the literature on the government-corruption nexus by examining the effects of taxation and various business regulations on cross-country corruption. Regulations considered include the number of procedures and related costs for business startup, licensing and property registrations. Results show that regulation, not taxation, generally positively impacts corruption and the effects of non-monetary regulatory costs are more significant than monetary costs. Findings are generally robust to an alternate corruption measure and to simultaneity between corruption and regulation. Results for ‘standard’ determinants of corruption largely support the literature. Policy implications are discussed.

JEL Classification: H26, H87, K42

Suggested Citation

Goel, Rajeev K., Business Regulation and Taxation: Effects on Cross-Country Corruption (2012). Journal of Economic Policy Reform, vol. 15 no.3 pp. 223-242, 2012. Available at SSRN: https://ssrn.com/abstract=2502983

Rajeev K. Goel (Contact Author)

Illinois State University - Department of Economics ( email )

Normal, IL 61790-4200
United States

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