The Intriguing Nexus Between Corruption and Capital Account Restrictions
Preprint
- 1 November 2005
- preprint
- Published by Elsevier in SSRN Electronic Journal
Abstract
The paper develops a theoretical model showing a mutual relationship between corruption and capital account restrictions. According to the model, higher corruption induces stricter restrictions and vice versa. We test the model using panel data for 112 countries over the period 1984-2002 and find that corruption and restrictions are indeed mutually determined. Estimating the model simultaneously, capital account restrictions induce higher corruption. Higher corruption, in turn, is associated with more restrictions on the capital account. The empirical relationship is, however, not completely robust.Keywords
All Related Versions
This publication has 34 references indexed in Scilit:
- The Intriguing Nexus Between Corruption and Capital Account RestrictionsSSRN Electronic Journal, 2005
- The Economic Costs of Corruption: A Survey and New EvidenceSSRN Electronic Journal, 2005
- Corruption Around the World: Evidence from a Structural ModelSSRN Electronic Journal, 2004
- Misconceptions and political outcomesThe Economic Journal, 2002
- New Tools in Comparative Political Economy: The Database of Political InstitutionsThe World Bank Economic Review, 2001
- The “New Political Economy”: Recent Books by Allen Drazen and by Torsten Persson and Guido TabelliniJournal of Economic Literature, 2000
- CorruptionThe Quarterly Journal of Economics, 1993
- How corruption may corruptJournal of Economic Behavior & Organization, 1990
- Biases in Dynamic Models with Fixed EffectsEconometrica, 1981
- Capital Controls, Political Risk, and Deviations from Interest-Rate ParityJournal of Political Economy, 1980