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Does Corruption Ease the Burden of Regulation? National and Subnational Evidence

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  • Breen, Michael
  • Gillanders, Robert

Abstract

Does corruption ease the burden of regulation? We test this question using survey data on business managers’ experience of dealing with regulation and corruption. We find that there is substantial within-country variation in the burden of regulation and that corruption is associated with worse regulatory outcomes across a range of indicators at the country and subnational level. Our results, which hold over a number of specifications, are inconsistent with the hypothesis that corruption greases the wheels of commerce by easing the burden of regulation on the average firm in poor regulatory environments. Rather, our results suggest that corruption increases the burden and imposes large costs on businesses

Suggested Citation

  • Breen, Michael & Gillanders, Robert, 2017. "Does Corruption Ease the Burden of Regulation? National and Subnational Evidence," MPRA Paper 82088, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:82088
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    More about this item

    Keywords

    Corruption; regulation; governance; entrepreneurship; business regulation;
    All these keywords.

    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • K20 - Law and Economics - - Regulation and Business Law - - - General
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • R50 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - General

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