Corruption and the effects of economic freedom

Abstract

The predictions that economic freedom is beneficial in reducing corruption have not been found to be universally robust in empirical studies. The present work reviews this relationship by using firms' data in a cross-country survey and argues that approaches using aggregated macro data have not been able to explain it appropriately. We model cross-country variations of the microfounded economic freedom-corruption relationship using multilevel models. Additionally, we analyze this relationship by disentangling the determinants for several components of economic freedom because not all areas affect corruption equally. The results show that the extent of the macro-effects on the measures of (micro)economic freedom for corruption, identified by the degree of economic development of a country, can explain why a lack of competition policies and government regulations may yield more corruption. Estimations for Africa and transition economy subsamples confirm our conjectures.JEL : H10; H11; H50; K20; O5

The effect of fiscal transparency on corruption: A panel cross‐country analysis

“…We rely on the aggregate Economic Freedom Index, published by the Heritage Foundation and the Wall Street Journal (Peyton and Belasen 2012). The index ranges from zero (least free) to 100 (most free), with economic freedom defined as market liberalization and low regulation (Pieroni and d'Agostino 2013).…”

The impact of cultural factors on the implementation of global accounting standards (IFRS) in a developing country

“…Prior research provides various proxies for choosing the relevant cultural factors in accounting research. 'Cultural factors' in this study refer to (a) training opportunities in the accounting profession (Haniffa & Cooke, 2002;Perera, 1989;Perera et al, 2012;Zeghal & Mhedhbi, 2006) and (b) corruption (Pieroni & D'Agostino, 2013;Rock & Bonnett, 2004;Wu, 2005Wu, , 2009Wu, Wu, Zhou, & Wu, 2012). To gain insights into cultural issues, two rounds of interviews (the first round in 2010 and the second round in 2011) are conducted and enforcement documents (1998)(1999)(2000)(2001)(2002)(2003)(2004)(2005)(2006)(2007)(2008)(2009)(2010) are analyzed.…”

Inclusive Institutions, Innovation and Economic Growth: Estimates for European Countries

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