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Business regulation and taxation: effects on cross-country corruption

Author

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  • Rajeev Goel

Abstract

This paper adds to the literature on the government-corruption nexus by examining the effects of taxation and various business regulations on cross-country corruption. Regulations considered include the number of procedures and related costs for business startup, licensing and property registrations. Results show that regulation, not taxation, generally positively impacts corruption and the effects of non-monetary regulatory costs are more significant than monetary costs. Findings are generally robust to an alternate corruption measure and to simultaneity between corruption and regulation. Results for ‘standard’ determinants of corruption largely support the literature. Policy implications are discussed.

Suggested Citation

  • Rajeev Goel, 2012. "Business regulation and taxation: effects on cross-country corruption," Journal of Economic Policy Reform, Taylor and Francis Journals, vol. 15(3), pages 223-242.
    • Handle: RePEc:taf:jecprf:v:15:y:2012:i:3:p:223-242
    DOI: 10.1080/17487870.2012.692468
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    Citations

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    Cited by:

    1. Rajeev K. Goel & Ummad Mazhar & James W. Saunoris, 2020. "Business operations, contestability, bureaucratic holdup, and bribe solicitations," Review of Development Economics, Wiley Blackwell, vol. 24(4), pages 1484-1510, November.
    2. Sanchari Choudhury, 2021. "Regulation and Corruption: Evidence from the United States," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 83(4), pages 897-934, August.
    3. Claudio Quintano & Paolo Mazzocchi, 2018. "Behind the GDP: some remarks on the shadow economy in Mediterranean countries," European Journal of Law and Economics, Springer, vol. 45(1), pages 147-173, February.
    4. Rajeev K. Goel & Ummad Mazhar & James W. Saunoris, 2021. "Identifying the corrupt cog in the wheel: Dimensions of supply chain logistics and cross‐country corruption," Australian Economic Papers, Wiley Blackwell, vol. 60(4), pages 693-709, December.
    5. Andrew E. Hansen‐Addy & Mario Davide Parrilli & Ishmael Tingbani, 2025. "The impact of the regulatory business environment on SMEs' funding choices in developing countries: Evidence from Africa," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 30(1), pages 941-960, January.
    6. Xingyuan Zhang & Rajeev K. Goel & Jiaming Jiang & Salvatore Capasso, 2023. "Do deep regional trade agreements strengthen anti‐corruption? A social network analysis," The World Economy, Wiley Blackwell, vol. 46(8), pages 2478-2513, August.
    7. Goel, Rajeev K. & Nelson, Michael A., 2016. "Shining a light on the shadows: Identifying robust determinants of the shadow economy," Economic Modelling, Elsevier, vol. 58(C), pages 351-364.
    8. Akouwerabou B. Denis, 2016. "Entrepreneurs Establishing Political Connection," SAGE Open, , vol. 6(3), pages 21582440166, August.
    9. Vincenzo Alfano & Salvatore Capasso & Rajeev K. Goel, 2021. "EU accession: A boon or bane for corruption?," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 45(1), pages 1-21, January.
    10. Rajeev K. Goel & Michael A. Nelson, 2021. "Corrupt encounters of the fairer sex: female entrepreneurs and their corruption perceptions/experience," The Journal of Technology Transfer, Springer, vol. 46(6), pages 1973-1994, December.
    11. Rajeev K. Goel & Ummad Mazhar & James W. Saunoris, 2018. "Market Contestability and Bribe Solicitations: Evidence Across Stages of Firms' Operations," CESifo Working Paper Series 6981, CESifo.

    More about this item

    JEL classification:

    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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