Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/212623 
Authors: 
Year of Publication: 
2008
Series/Report no.: 
BOFIT Discussion Papers No. 10/2008
Publisher: 
Bank of Finland, Institute for Economies in Transition (BOFIT), Helsinki
Abstract: 
This paper uses recent data on a large cross-section of countries to study the determinants of corrupt activity. The main contribution is to examine the effects of different types and severities of government regulations on corrupt activities. The results show that greater prosperity and democracy lead to less corrupt activity. Variables representing the degree of fractionalization across three dimensions and least developed nations are statistically insignificant. Having more regulation, including number of procedures and time involved across four categories (business startup, licensing, property registration, and taxation), leads to greater corruption. More regulatory procedures, especially for business startups and property registrations, have the most corruption-enhancing effect. Whereas lengthier procedures also generally spur corruption, there are important differences. Finally, higher regulatory transactions costs do not seem to significantly impact corruption. Policy implications are discussed.
Subjects: 
Corruption
Business startup
Licenses
Property
Taxes
Fractionalization
De-mocracy
Prosperity
JEL: 
H26
H87
K42
Persistent Identifier of the first edition: 
ISBN: 
978-952-462-911-6
Document Type: 
Working Paper

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