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Moderation of the Relationship Between Size of Government and Corruption by Democracy

Nedra Baklouti () and Younes Boujelbene
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Nedra Baklouti: University of Sfax
Younes Boujelbene: University of Sfax

Journal of the Knowledge Economy, 2018, vol. 9, issue 4, 1210-1223

Abstract: Abstract Previous studies on the effect of government size on corruption have produced mixed results. In an attempt to explain these ambiguous results, this study investigates the effect of government size on corruption by taking into account the role of the democracy in each country. Using static and dynamic panel data method for a panel of 12 MENA countries and 9 countries belonging to Western Europe during the period 1998–2011, the estimation results indicate that an increase in government size can lead to a decrease in corruption if the democracy level is sufficiently high and, in contrast, can lead to an increase in corruption if it is too low.

Keywords: Size of government; Democracy; Corruption; Dynamic panel estimators (search for similar items in EconPapers)
JEL-codes: C13 P16 P35 (search for similar items in EconPapers)
Date: 2018
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Handle: RePEc:spr:jknowl:v:9:y:2018:i:4:d:10.1007_s13132-016-0410-8