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Taxation, corruption and the exchange rate regime

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  • Hefeker, Carsten

Abstract

The paper analyzes the relation between institutional quality, such as corruption, in a country and its monetary regime. It is shown that a credibly fixed exchange rate to a low inflation country, like a currency board, can reduce corruption and improve the fiscal system. A monetary union, however, has ambiguous effects. I find that there is convergence between countries with regard to the level of corruption. --

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Bibliographic Info

Paper provided by Hamburg Institute of International Economics (HWWI) in its series HWWI Research Papers with number 2-12.

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Date of creation: 2008
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Handle: RePEc:zbw:hwwirp:2-12

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Keywords: Exchange Rate Regime; Monetary Policy; Fiscal Policy; Seigniorage; Corruption; Developing and Transition Countries;

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Cited by:
  1. Ferré Carracedo, Montserrat & García Fortuny, Judit & Manzano, Carolina, 2013. "The Conservativeness of the Central Bank when Institutional Quality is Poor," Working Papers 2072/222198, Universitat Rovira i Virgili, Department of Economics.
  2. Frank Bohn, 2013. "The Politics of Surprise Devaluations: Modelling Motives for Giving Up a Peg," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 233(5-6), pages 562-574, October.
  3. Katherina Popkova, 2011. "Can the exchange rate regime influence corruption?," Volkswirtschaftliche Diskussionsbeiträge, Universität Siegen, Fakultät Wirtschaftswissenschaften, Wirtschaftsinformatik und Wirtschaftsrecht 148-11, Universität Siegen, Fakultät Wirtschaftswissenschaften, Wirtschaftsinformatik und Wirtschaftsrecht.
  4. Pierre Faure, 2011. "A note on poor-institution traps in international fiscal policy games," Economics Bulletin, AccessEcon, vol. 31(1), pages 375-387.
  5. Meixing Dai & Moïse Sidiropoulos & Eleftherios Spyromitros, 2014. "Fiscal policy, institutional quality and central bank transparency," Working Papers of BETA 2014-04, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
  6. Pierre-Henri Faure, 2011. "Does the fight against corruption require international cooperation?," Working Papers hal-00610523, HAL.
  7. Dimakou, Ourania, 2013. "Monetary and fiscal institutional designs," Journal of Comparative Economics, Elsevier, vol. 41(4), pages 1141-1166.

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