Does economic growth undermines Public sector corruption. A cross sectional analysis
Abstract
This paper uses cross country data to test empirically whether investment increases with corruption. The estimates show that Public sector corruption is low among developed countries and high among developing countries. Based on inter-regional tax model we develop a model of inter-regional competition to estimate the external shocks on Public sector corruption. The estimate show stability or growth in the economic indicator variables decreases the impact of public sector corruption. In addition increases in total factor productivity with governance effective measures decrease the level of public sector corruption. And the consumers’ ability to switch between regional acquisitions of public sector services enhances regional competition in the provision of Public sector services and reduces “kick back tax” charged on the procurement of these services
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