Abstract
Using cross-section of 83 countries, this paper empirically examines the relationship between corruption and government expenditure volatility. A country`s corruption is denoted by either control of corruption, compiled by Kaufmann et al. (2008), or corruption perceptions index, provided by Transparency International. In addition, a country`s government expenditure volatility is measured by the standard deviation of the change ratio of government expenditure from 1990 to 2005. Regression results suggest that a country`s control of corruption and corruption perceptions index (higher ratings signifying more transparency) are significantly and negatively associated with the volatility of government expenditure. However, the estimated coefficients of corruption perceptions index show somewhat reduced statistical significances. The results are robust to the sub-sample of countries excluding European OECD countries. Therefore, the regression results suggest corrupt bureaucrats are able to periodically change economic rules of the game, which results in the possibility of a higher variance in government expenditure.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callMore From: Journal of the Korea Academia-Industrial cooperation Society
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
