Date and Time: January 17th, 2018, 10:00 - 11:30 am
Room: A 101 in the Economics Building (Museum)
This paper examines the empirical relationship between economic freedom and corruption. We use a principal-agent-client model to identify the potential causal linkages between corruption and the components of economic freedom. We then estimate a twoequation system where freedom depends upon corruption and vice versa.
Using a series of panel GMM estimators, we find that corruption lowers economic freedom, but that freedom does not significantly impact corruption. The result that corruption lowers freedom supports the “grabbing handing” theory of corruption where a non-benevolent government creates inefficient regulation and barriers of entry to create economic rents.
About the Speaker
Steve J. Yamarik is professor at the California State University Long Beach and research associate of our HenU Center for Financial Development and Stability. His research interests are economic growth and development, regional economics and international trade.