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Business regulation and taxation: effects on cross-country corruption

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

    1. Weill, Laurent, 2011. "How corruption affects bank lending in Russia," Economic Systems, Elsevier, vol. 35(2), pages 230-243, June.
    2. Belousova, Veronika & Rajeev, K. Goel & Korhonen, Iikka, 2011. "Causes of Corruption in Russia: A Disaggregated Analysis," Discussion Paper Series 557, Institute of Economic Research, Hitotsubashi University.
    3. 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 Group Munich.
    4. 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.
    5. Quintano, Claudio & Mazzocchi, Paolo, 2013. "The shadow economy beyond European public governance," Economic Systems, Elsevier, vol. 37(4), pages 650-670.
    6. Rajeev K. Goel, 2012. "Business regulation and taxation: effects on cross-country corruption," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 15(3), pages 223-242, September.
    7. Veronika Belousova & Rajeev Goel & Iikka Korhonen, 2016. "Corruption perceptions versus corruption incidence: Competition for rents across Russian regions," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 40(1), pages 172-187, January.
    8. repec:kap:ejlwec:v:45:y:2018:i:1:d:10.1007_s10657-014-9434-3 is not listed on IDEAS
    9. repec:hhs:bofitp:2011_031 is not listed on IDEAS
    10. repec:hhs:bofitp:2008_010 is not listed on IDEAS

    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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