Does Economic Freedom Determine the Control of Corruption?

Year 2019, Volume: 2 Issue: 2, 79 - 96, 20.03.2019

Subhia Jichi , Saliha Cabro

Abstract

    The article aims to examine whether or not the economic
freedom (EFI) matters for the control of corruption (COR). The
relationship between variables of interest is explored in three panels.
The first overall panel contains 113 countries; the second contains 36
developed countries, while the third panel contains 77 developing
countries in the time span ranging from 2002 to 2016. The findings of
linear dynamic panel data estimators confirm the positive impact that is
found to be higher in terms of developed countries. Granger causality
test indicates a bidirectional relationship between EFI and COR in overall
sample as well as in the case of both, developed and developing
countries. ARDL framework reports a significant positive relationship
between variables of interest in both, short- and the long-term.
Therefore, the overall conclusion indicates that policy makers
need to enable and create legal and institutional basis for securing
economic freedom in order to improve the control of corruption

Keywords

ARDL approach, Causality, control of corruption, economic freedom

Does Economic Freedom Determine the Control of Corruption?

Abstract

    The article aims to examine whether or not the economic freedom (EFI) matters for the control of corruption (COR). The relationship between variables of interest is explored in three panels. The first overall panel contains 113 countries; the second contains 36 developed countries, while the third panel contains 77 developing countries in the time span ranging from 2002 to 2016. The findings of linear dynamic panel data estimators confirm the positive impact that is found to be higher in terms of developed countries. Granger causality test indicates a bidirectional relationship between EFI and COR in overall sample as well as in the case of both, developed and developing countries. ARDL framework reports a significant positive relationship between variables of interest in both, short- and the long-term. Therefore, the overall conclusion indicates that policy makers need to enable and create legal and institutional basis for securing economic freedom in order to improve the control of corruption

Keywords

ARDL approach, Causality, Control of corruption, Economic freedom

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