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Corruption as a response to regulation

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  • Noel D., Johnson
  • William, Ruger
  • Jason, Sorens
  • Steven, Yamarik

Abstract

Previous research has found a negative effect of corruption on growth in the United States. However, some theory suggests corruption might have a positive impact in places with dysfunctional political institutions. This paper investigates whether the corruption-growth link is conditional on the extent of government involvement across U.S. states. Even though no state approaches the level of government intervention found in many developing countries, we still find evidence that corruption’s harmful effects on growth are smaller when regulation is greater.

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File URL: http://mpra.ub.uni-muenchen.de/36873/
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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 36873.

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Date of creation: Feb 2012
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Handle: RePEc:pra:mprapa:36873

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Keywords: Corruption; U.S. States; Growth; Regulation;

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References

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  1. Pierre-Guillaume Méon & Laurent Weill, . "Is corruption an efficient grease?," ULB Institutional Repository 2013/8408, ULB -- Universite Libre de Bruxelles.
  2. Fisman, Raymond & Svensson, Jakob, 2007. "Are corruption and taxation really harmful to growth? Firm level evidence," Journal of Development Economics, Elsevier, vol. 83(1), pages 63-75, May.
  3. Pierre-Guillaume Méon & Khalid Sekkat, 2005. "Does corruption grease or sand the wheels of growth?," Public Choice, Springer, vol. 122(1), pages 69-97, January.
  4. Egger, Peter & Winner, Hannes, 2005. "Evidence on corruption as an incentive for foreign direct investment," European Journal of Political Economy, Elsevier, vol. 21(4), pages 932-952, December.
  5. Thomas A. Garrett & Russell M. Rhine, 2011. "Economic freedom and employment growth in U.S. states," Review, Federal Reserve Bank of St. Louis, issue Jan, pages 1-18.
  6. Francis T. Lui, 1996. "Three Aspects Of Corruption," Contemporary Economic Policy, Western Economic Association International, vol. 14(3), pages 26-29, 07.
  7. Levy, Daniel, 2007. "Price adjustment under the table: Evidence on efficiency-enhancing corruption," European Journal of Political Economy, Elsevier, vol. 23(2), pages 423-447, June.
  8. Solow, Robert M., 2000. "Growth Theory: An Exposition," OUP Catalogue, Oxford University Press, edition 2, number 9780195109030, September.
  9. Noel Johnson & Courtney LaFountain & Steven Yamarik, 2011. "Corruption is bad for growth (even in the United States)," Public Choice, Springer, vol. 147(3), pages 377-393, June.
  10. Gasper A. Garofalo & Steven Yamarik, 2002. "Regional Convergence: Evidence From A New State-By-State Capital Stock Series," The Review of Economics and Statistics, MIT Press, vol. 84(2), pages 316-323, May.
  11. Goel, Rajeev K & Nelson, Michael A, 1998. " Corruption and Government Size: A Disaggregated Analysis," Public Choice, Springer, vol. 97(1-2), pages 107-20, October.
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