Investigating the Interaction Effect of Democracy and Economic Freedom on Corruption: A Cross-Country Quantile Regression Analysis
AbstractThis paper explores the interaction effects of economic freedom and democracy in controlling corruption for 100 countries by using quantile regression technique. The main contribution is to explore the interaction effects throughout conditional distribution of corruption across nations. Our results reinforce some findings in the literature, but also provide new conclusions. The findings suggest a stronger and significant interaction effect in reducing corruption, especially in the most-corrupt countries. However, democratic and economic freedoms alone may not cure corruption effectively in the most-corrupt nations, a sound democratic reform can eliminate corruption substantially only after achieving a threshold level of economic freedom.
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Bibliographic InfoArticle provided by Queensland University of Technology (QUT), School of Economics and Finance in its journal Economic Analysis and Policy (EAP).
Volume (Year): 42 (2012)
Issue (Month): 3 (December)
Corruption; Democracy; Economic freedom; Quantile regression;
Find related papers by JEL classification:
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Longitudinal Data; Spatial Time Series
- K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
- O50 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - General
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