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Dynamic Effects of Corruption on General Government Final Consumption Expenditure: Evidence from OECD Countries

Emin Efecan Aktas ()
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Emin Efecan Aktas: PhD. Researcher, Hatay Mustafa Kemal University, Department of Public Finance, Hatay, Turkey

Public Finance Quarterly, 2021, vol. 66, issue 4, 551 - 567

Abstract: The relationship of corruption with macroeconomic indicators and its widespread negative impact over the years has been the subject of many empirical studies. Public expenditures, which are among these macroeconomic indicators, are one of the fiscal policy tools and their size and amount can be alternated by policymakers who gain an advantage from corruption. In this respect, the effect of corruption on the state's consumption expenditures is examined by system GMM panel data analysis in this study. Using four different corruption indexes in terms of robustness check, and forecasts covering the 2002-2018 period for 37 OECD countries shows that the corruption index in the 3 models is significantly and positively related to public expenditures, while the other corruption index is positively but insignificantly correlated.

Keywords: corruption; government expenditure; system GMM (search for similar items in EconPapers)
JEL-codes: C23 D73 H50 (search for similar items in EconPapers)
Date: 2021
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