Abstract
Using country-level panel data, this study tests whether a country’s decision to join a preferential trade agreement (PTA) or existing participation in one affects its corruption levels. The sample for this study pertains mostly to first-generation PTAs that arose prior to the World Trade Organization (WTO). The results suggest that member nations that entered into pre-WTO PTAs exhibited higher levels of corruption. This claim is general and is not indicative of the undesirability of trade agreements. Nevertheless, the findings reveal interesting factors related to trade agreements in the pre-WTO period.
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