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Trade protection and bureaucratic corruption: an empirical investigation

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  • Pushan Dutt

Abstract

We examine whether protectionist trade policies lead to increased bureaucratic corruption. Using multiple measures of corruption and trade policies, we find strong evidence that corruption is significantly higher in countries with protectionist trade policies. These results are robust to endogeneity concerns. Next, a panel-data-based GMM methodology is used to estimate a dynamic model of corruption. This estimator controls for country-specific effects, potential endogeneity of trade policy, and existence of measurement errors afflicting the corruption data. The paper strengthens the case for trade liberalization and argues that trade reforms may lead to improvements in governance.

Suggested Citation

  • Pushan Dutt, 2009. "Trade protection and bureaucratic corruption: an empirical investigation," Canadian Journal of Economics, Canadian Economics Association, vol. 42(1), pages 155-183, February.
    • Handle: RePEc:cje:issued:v:42:y:2009:i:1:p:155-183
    DOI: 10.1111/j.1540-5982.2008.01503.x
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    Cited by:

    1. Chen, Yanting & Liu, Qijun, 2018. "Public-sector wages and corruption: An empirical study," European Journal of Political Economy, Elsevier, vol. 54(C), pages 189-197.
    2. Elbahnasawy, Nasr G., 2014. "E-Government, Internet Adoption, and Corruption: An Empirical Investigation," World Development, Elsevier, vol. 57(C), pages 114-126.
    3. Carlos Felipe Jaramillo & Daniel Lederman & Maurizio Bussolo & David Gould & Andrew Mason, 2006. "Challenges of CAFTA : Maximizing the Benefits for Central America," World Bank Publications - Books, The World Bank Group, number 7127, December.
    4. DeMaria, Federica & Franco, Chiara & Solferino, Nazaria, 2015. "Corruption and innovation: the mediating role of trade," AICCON Working Papers 139-2015, Associazione Italiana per la Cultura della Cooperazione e del Non Profit.
    5. João Martins & Linda Veiga & Bruno Fernandes, 2023. "Are electronic government innovations helpful to deter corruption? Evidence from across the world," Economics and Politics, Wiley Blackwell, vol. 35(3), pages 1177-1203, November.
    6. Majumderad, Monoj Kumar & Raghavan, Mala & Vespignani, Joaquin, 2020. "Oil Curse," MPRA Paper 101138, University Library of Munich, Germany, revised 2020.
    7. Majumder, Monoj Kumar & Raghavan, Mala & Vespignani, Joaquin, 2020. "Oil curse, economic growth and trade openness," Energy Economics, Elsevier, vol. 91(C).
    8. Shepherd, Ben, 2009. "Speed Money: Time, Corruption, and Trade," MPRA Paper 17337, University Library of Munich, Germany.
    9. James Fenske, 2014. "Ecology, Trade, And States In Pre-Colonial Africa," Journal of the European Economic Association, European Economic Association, vol. 12(3), pages 612-640, June.
    10. Van-Ha Le & Jakob de Haan & Erik Dietzenbacher & Jakob de Haan, 2013. "Do Higher Government Wages Reduce Corruption? Evidence Based on a Novel Dataset," CESifo Working Paper Series 4254, CESifo.
    11. Jha, Chandan Kumar & Sarangi, Sudipta, 2017. "Does social media reduce corruption?," Information Economics and Policy, Elsevier, vol. 39(C), pages 60-71.
    12. Gans-Morse, Jordan & Borges, Mariana & Makarin, Alexey & Mannah-Blankson, Theresa & Nickow, Andre & Zhang, Dong, 2018. "Reducing bureaucratic corruption: Interdisciplinary perspectives on what works," World Development, Elsevier, vol. 105(C), pages 171-188.
    13. Tereza Nìmeèková & Arshad Hayat, 2022. "Does trade openness improve the quality of domestic institutions? Evidence from Africa," Equilibrium. Quarterly Journal of Economics and Economic Policy, Institute of Economic Research, vol. 17(4), pages 881-908, December.
    14. Felipe Starosta de Waldemar, 2010. "How costly is rent-seeking to diversification: an empirical approach," Documents de travail du Centre d'Economie de la Sorbonne 10008, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    15. Veysel Avsar & Alexis Habiyaremye & Umut Unal, 2016. "Does Corruption Increase Antidumping Investigations?," International Journal of Economics and Financial Issues, Econjournals, vol. 6(2), pages 660-665.
    16. Victoria Pistikou, 2020. "The Impact of CEFTA on Exports, Economic Growth and Development," International Journal of Business and Economic Sciences Applied Research (IJBESAR), International Hellenic University (IHU), Kavala Campus, Greece (formerly Eastern Macedonia and Thrace Institute of Technology - EMaTTech), vol. 13(3), pages 15-31, December.
    17. Amarendra SHARMA & Oscar CÁRDENAS, 2018. "Remittances and labour market outcomes: Evidence from Mexico," International Labour Review, International Labour Organization, vol. 157(2), pages 193-212, June.
    18. James Fenske, 2014. "Ecology, Trade, And States In Pre-Colonial Africa," Journal of the European Economic Association, European Economic Association, vol. 12(3), pages 612-640, 06.

    More about this item

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption

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