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Did the Euro Really Increase Corruption in the Eurozone? A Counterfactual Analysis

Author

Listed:
  • Arielle Beyaert

    (University of Murcia)

  • José García-Solanes

    (University of Murcia)

  • Laura López-Gómez

    (University of Murcia)

Abstract

In this paper we apply the Synthetic Control Method developed by Abadie, Diamond and Hainmüeller (2010) to assess the extent to which the adoption of the euro has affected corruption in three groups of Eurozone countries: the core, southern and eastern countries. To do so, we construct counterfactuals for each group and for individual countries and compare them with the actual evolution of the corruption-control indicator. Except in the case of the Netherlands, where significant negative effects are detected, we find evidence that the adoption of the euro has either contributed to reducing corruption or has not affected it significantly.

Suggested Citation

  • Arielle Beyaert & José García-Solanes & Laura López-Gómez, 2023. "Did the Euro Really Increase Corruption in the Eurozone? A Counterfactual Analysis," Hacienda Pública Española / Review of Public Economics, IEF, vol. 244(1), pages 3-36, March.
    • Handle: RePEc:hpe:journl:y:2023:v:244:i:1:p:3-36
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    References listed on IDEAS

    as
    1. Jesús Fernández-Villaverde & Luis Garicano & Tano Santos, 2013. "Political Credit Cycles: The Case of the Eurozone," Journal of Economic Perspectives, American Economic Association, vol. 27(3), pages 145-166, Summer.
    2. Alberto Abadie & Javier Gardeazabal, 2003. "The Economic Costs of Conflict: A Case Study of the Basque Country," American Economic Review, American Economic Association, vol. 93(1), pages 113-132, March.
    3. Glawe, Linda & Wagner, Helmut, 2021. "Convergence, divergence, or multiple steady states? New evidence on the institutional development within the European Union," Journal of Comparative Economics, Elsevier, vol. 49(3), pages 860-884.
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    6. Alberto Abadie & Alexis Diamond & Jens Hainmueller, 2015. "Comparative Politics and the Synthetic Control Method," American Journal of Political Science, John Wiley & Sons, vol. 59(2), pages 495-510, February.
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    More about this item

    Keywords

    Corruption; Counterfactual analysis; Eurozone; Synthetic Control Method.;
    All these keywords.

    JEL classification:

    • F00 - International Economics - - General - - - General
    • F50 - International Economics - - International Relations, National Security, and International Political Economy - - - General
    • P48 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies

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