Corruption Symposium

Journal of Economics and Finance

, Volume 30, Issue 2, pp 240-250

First online:

Corruption in transition economies: Effects of government size, country size and economic reforms

  • Rajeev K. GoelAffiliated withDepartment of Economics, Illinois State University Email author 
  • , Jelena BudakAffiliated withInstitute of Economics

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Abstract

This paper uses annual pooled data over 1998–2002 for transition countries to examine whether government size or country size matters more in its impact on corruption; and whether piecemeal reforms or comprehensive transition reforms are desirable for corruption reduction. Our results show that greater economic prosperity leads to lower corruption, and contrary to findings for other nations, a bigger government size seems toreduce corruption in transition nations. The geographic size of a country is positive and significant, suggesting that more spread out countries would have a harder time controlling corruption. Comprehensive transition reforms might work best at corruption reduction.