Taxation, Corruption and the Exchange Rate Regime

Carsten Hefeker

No 17, Proceedings of the German Development Economics Conference, Zurich 2008 from Verein für Socialpolitik, Research Committee Development Economics

Abstract: The paper analyzes the relation between institutional quality, such as corruption, in a country and its monetary regime. It is shown that a credibly fixed exchange rate to a low inflation country, like a currency board, can reduce corruption and improve the fiscal system. A monetary union, however, has ambiguous effects. I find that that there is convergence between countries with regard to the level of corruption.

Keywords: Exchange Rate Regime; Monetary Policy; Fiscal Policy; Seigniorage; Corruption; Developing and Transition Countries (search for similar items in EconPapers)
JEL-codes: D72 E63 F33 (search for similar items in EconPapers)
Date: 2008
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Related works:
Journal Article: Taxation, corruption and the exchange rate regime (2010)
Working Paper: Taxation, Corruption and the Exchange Rate Regime (2009)
Working Paper: Taxation, Corruption and the Exchange Rate Regime (2009)
Working Paper: Taxation, corruption and the exchange rate regime (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:gdec08:17

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