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How Does Corruption Affect Public Debt? An Empirical Analysis

Listed author(s):
  • Arusha Cooray
  • Friedrich Schneider

This paper examines the relationship between corruption and public debt in 106 countries. Results suggest that corruption leads to an increase in public debt. We also investigate if the effect of corruption on pblic debt is increased by government expenditure, the shadow economy and military expenditure. We find that the effect of corruption on public debt is compounded by increased government expenditure and increased size of the shadow economy.

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File URL: http://www.econ.jku.at/papers/2013/wp1322.pdf
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Paper provided by Department of Economics, Johannes Kepler University Linz, Austria in its series Economics working papers with number 2013-22.

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Length: 30 pages
Date of creation: Dec 2013
Handle: RePEc:jku:econwp:2013_22
Contact details of provider: Fax: +43 732-2468-8238
Web page: http://www.econ.jku.at/

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