Live Free Or Bribe: On The Causal Dynamics Between Economic Freedom and Corruption in U.S. States
|dc.identifier.citation||Apergis, Nicholas and Dincer, Oguzhan C. and Payne, James E. 2012. Live Free Or Bribe: On The Causal Dynamics Between Economic Freedom and Corruption in U.S. States. European Journal of Political Economy. 28 (2): pp. 215-226.|
We investigate the relationship between economic freedom and corruption using data from U.S. states covering almost a quarter of a century. Our study advances the existing literature on several fronts. First, instead of using subjective cross-country corruption indices assembled by various investment risk services, we use a more objective measure of corruption: the number of government officials convicted in a state for crimes related to corruption. Second, unlike previous studies, we exploit both time series and cross-sectional variation in the data in the estimation of a panel error correction model. The panel error correction model results show that in the long-run economic freedom, per capita income, and education have a negative and statistically significant impact on corruption whereas income inequality has a positive and statistically significant impact. The causality tests associated with the panel error correction model reveal bidirectional causality between economic freedom and corruption in both the short-run and long-run.
|dc.publisher||Elsevier BV * North-Holland|
|dc.subject||Panel error correction model|
|dc.title||Live Free Or Bribe: On The Causal Dynamics Between Economic Freedom and Corruption in U.S. States|
|dcterms.source.title||European Journal of Political Economy|
|curtin.accessStatus||Fulltext not available|
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