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
Date Written: 2012
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: Suggested Citation