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Government economic intervention and corruption

Author

Listed:
  • Nicholas A. Lash
  • Bala Batavia

    (Loyola University Chicago, USA
    DePaul University, USA)

Abstract

Corruption is a serious problem worldwide, especially in developing countries. This study investigates the impact of eight forms of government economic intervention on corruption in 157 countries grouped either by per-capita income or by region, for the period 2000 to 2006. The evidence shows that property rights were consistently the most important source of corruption suggesting that anti-corruption efforts should start with reforming the legal system. Corruption was also found associated with government intervention in business and trade and less so in the financial and monetary areas. Government spending and taxation were negatively associated with corruption, implying that what contributes most to corruption is not government size or taxes, but instead regulations and the failure to adequately protect property rights. There appears to be ample room to reduce corruption, especially for developing economies by simplifying and reducing government economic intervention.

Suggested Citation

  • Nicholas A. Lash & Bala Batavia, 2013. "Government economic intervention and corruption," Journal of Developing Areas, Tennessee State University, College of Business, vol. 47(2), pages 1-15, July-Dece.
    • Handle: RePEc:jda:journl:vol.47:year:2013:issue2:pp:1-15
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    File URL: http://muse.jhu.edu/journals/journal_of_developing_areas/v047/47.2.lash.html
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    Citations

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    Cited by:

    1. Slobodan Cerovic & Nemanja Stanišic & Tijana Radojevic & Nikica Radovic, 2015. "The Impact of Ownership Structure on Corporate Performance in Transitional Economies," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 17(38), pages 441-441, February.
    2. Nicolas A. LASH & Bala BATAVIA, 2016. "Government Policies And Micro Lending In Emerging Markets," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 17, pages 9-32, June.
    3. Nicholas A. Lash & Bala Batavia, 2019. "Corruption and Doing Business in Emerging Markets," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 9(11), pages 1279-1289, November.
    4. Graziella Bonanno & Lucia Errico & Nadia Fiorino & Roberto Ricciuti, 2024. "The Impact of Government Size on Corruption: A Meta-Regression Analysis," CESifo Working Paper Series 10956, CESifo.
    5. Kshitiz Shrestha & Jorge Martinez‐Vazquez & Charles Hankla, 2023. "Political decentralization and corruption: Exploring the conditional role of parties," Economics and Politics, Wiley Blackwell, vol. 35(1), pages 411-439, March.
    6. Muhammad Ahsan Ali Raza & Chen Yan & Hafiz Syed Mohsin Abbas & Atta Ullah, 2021. "Impact of institutional governance and state determinants on foreign direct investment in Asian economies," Growth and Change, Wiley Blackwell, vol. 52(4), pages 2596-2613, December.

    More about this item

    Keywords

    Corruption; Regulation; Property Rights;
    All these keywords.

    JEL classification:

    • E26 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Informal Economy; Underground Economy
    • F00 - International Economics - - General - - - General
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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