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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
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    Cited by:

    1. repec:eee:iepoli:v:39:y:2017:i:c:p:60-71 is not listed on IDEAS
    2. repec:eee:wdevel:v:105:y:2018:i:c:p:171-188 is not listed on IDEAS
    3. Van-Ha Le & Jakob de Haan & Erik Dietzenbacher, 2013. "Do Higher Government Wages Reduce Corruption? Evidence Based on a Novel Dataset," CESifo Working Paper Series 4254, CESifo Group Munich.
    4. 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.
    5. Felipe Starosta de Waldemar, 2010. "How costly is rent-seeking to diversification : an empirical approach," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00461486, HAL.
    6. 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.
    7. 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.
    8. Shepherd, Ben, 2009. "Speed Money: Time, Corruption, and Trade," MPRA Paper 17337, University Library of Munich, Germany.
    9. Carlos Felipe Jaramillo & Daniel Lederman & Maurizio Bussolo & David Gould & Andrew Mason, 2006. "Challenges of CAFTA : Maximizing the Benefits for Central America," World Bank Publications, The World Bank, number 7127, August.
    10. 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.
    11. Amarendra Sharma, 2015. "Did Infant Mortality Decline cause Fertility Decline? Evidence from a Panel Data Analysis of Developing Countries," Economics Bulletin, AccessEcon, vol. 35(1), pages 283-290.
    12. repec:eee:wdevel:v:99:y:2017:i:c:p:271-284 is not listed on IDEAS
    13. 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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