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Did the Euro Really Increase Corruption in the Eurozone? A Counterfactual Analysis

Author

Listed:
  • Arielle Beyaert

    (University of Murcia)

  • Jos Garc a-Solanes

    (University of Murcia)

  • Laura L pez-G mez

    (University of Murcia)

Abstract

In this paper we apply the Synthetic Control Method developed by Abadie, Diamond and Hainm eller (2010) to assess the extent to which the adoption of the euro has affected corruption in three groups of Eurozone countries: the core, southern and eastern countries. To do so, we construct counterfactuals for each group and for individual countries and compare them with the actual evolution of the corruption-control indicator. Except in the case of the Netherlands, where significant negative effects are detected, we find evidence that the adoption of the euro has either contributed to reducing corruption or has not affected it significantly.

Suggested Citation

  • Arielle Beyaert & Jos Garc a-Solanes & Laura L pez-G mez, 2023. "Did the Euro Really Increase Corruption in the Eurozone? A Counterfactual Analysis," Hacienda Pública Española / Review of Public Economics, IEF, vol. 244(1), pages 3-36, March.
    • Handle: RePEc:hpe:journl:y:2023:v:244:i:1:p:3-36
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    References listed on IDEAS

    as
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    JEL classification:

    • F00 - International Economics - - General - - - General
    • F50 - International Economics - - International Relations, National Security, and International Political Economy - - - General
    • P48 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies

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