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Government size, market-orientation and regional corruption: Evidence from the provincial level panel data

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  • Li’an Zhou

  • Jing Tao

Abstract

Using a panel data at the provincial level during the period of 1989–2004, this paper examines the effects of social and economic factors such as government scale, privatization, openness, and education on regional corruption. Applying a fixed-effect model and IV estimation, we find that government size positively affects the incidence rate of corruption, and the effect becomes larger with the increase in the size of the core department of the government. 1% increase in the core department of the government leads to a 0.68%–1% increase in the number of corruption cases. While the proportion of FDI is positively associated with the corruption of regional officials, the ratio of the import and export trade to GDP is negatively associated with corruption. The impact of privatization on corruption is ambiguous. We also identify the significant impacts of the size and structure of the government expenditure on corruption. Keywords corrup
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  • Li’an Zhou & Jing Tao, 2009. "Government size, market-orientation and regional corruption: Evidence from the provincial level panel data," Frontiers of Economics in China, Springer;Higher Education Press, vol. 4(3), pages 425-448, September.
    • Handle: RePEc:spr:frecch:v:4:y:2009:i:3:p:425-448
    DOI: 10.1007/s11459-009-0023-2
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    2. Changqi Wu & Zhicheng Liu, 2012. "A Tiger Without Teeth? Regulation of Administrative Monopoly Under China’s Anti-Monopoly Law," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 41(1), pages 133-155, August.

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    JEL classification:

    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H83 - Public Economics - - Miscellaneous Issues - - - Public Administration

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