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Moderation of the Relationship Between Size of Government and Corruption by Democracy

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  • Nedra Baklouti

    (University of Sfax)

  • Younes Boujelbene

    (University of Sfax)

Abstract

Previous studies on the effect of government size on corruption have produced mixed results. In an attempt to explain these ambiguous results, this study investigates the effect of government size on corruption by taking into account the role of the democracy in each country. Using static and dynamic panel data method for a panel of 12 MENA countries and 9 countries belonging to Western Europe during the period 1998–2011, the estimation results indicate that an increase in government size can lead to a decrease in corruption if the democracy level is sufficiently high and, in contrast, can lead to an increase in corruption if it is too low.

Suggested Citation

  • Nedra Baklouti & Younes Boujelbene, 2018. "Moderation of the Relationship Between Size of Government and Corruption by Democracy," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 9(4), pages 1210-1223, December.
    • Handle: RePEc:spr:jknowl:v:9:y:2018:i:4:d:10.1007_s13132-016-0410-8
    DOI: 10.1007/s13132-016-0410-8
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    More about this item

    Keywords

    Size of government; Democracy; Corruption; Dynamic panel estimators;
    All these keywords.

    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State
    • P35 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Public Finance

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