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Taxation, Corruption and the Exchange Rate Regime

  • Carsten Hefeker

    ()

    (University of Siegen)

The paper analyzes the relation between institutional quality, such as corruption, in a country and its monetary regime. It is shown that a credibly fixed exchange rate to a low inflation country, like a currency board, can reduce corruption and improve the fiscal system. A monetary union, however, has ambiguous effects. I find that that there is convergence between countries with regard to the level of corruption.

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File URL: http://www.uni-marburg.de/fb02/makro/forschung/magkspapers/11-2009_hefeker.pdf
File Function: First version, 2009
Download Restriction: no

Paper provided by Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung) in its series MAGKS Papers on Economics with number 200911.

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Length: 24 pages
Date of creation: 2009
Date of revision:
Publication status: Forthcoming in
Handle: RePEc:mar:magkse:200911
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Fax: 06421/28-4858
Web page: http://www.uni-marburg.de/fb02/
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