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Moderation of the Relationship Between Size of Government and Corruption by Democracy

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Abstract

Previous studies on the effect of government size on corruption have produced mixed results. In an attempt to explain these ambiguous results, this study investigates the effect of government size on corruption by taking into account the role of the democracy in each country. Using static and dynamic panel data method for a panel of 12 MENA countries and 9 countries belonging to Western Europe during the period 1998–2011, the estimation results indicate that an increase in government size can lead to a decrease in corruption if the democracy level is sufficiently high and, in contrast, can lead to an increase in corruption if it is too low.

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Notes

  1. Tunisia, Algeria, Libya, Morocco, Egypt, Kuwait, Iran, Arabia, Jordan, Bahrain, Lebanon, Oman.

  2. Germany, Austria, France, Spain, Ireland, Denmark, Iceland, Finland, Cyprus.

  3. Democracy is an institutional arrangement which citizens express their preferences through elections (Schumpeter, 1950), and to be effective, the implementation conditions such as political rights and civil liberties, such as freedom of expression are considered necessary.

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Authors and Affiliations

  1. Faculty of Economics and Management, University of Sfax, Airport Road Km 4, Sfax, 3018, Tunisia

    Nedra Baklouti

  2. Faculty of Economics and Management, University of Sfax, Sfax, Tunisia

    Younes Boujelbene

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  1. Nedra Baklouti
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  2. Younes Boujelbene
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Correspondence to Nedra Baklouti.

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Baklouti, N., Boujelbene, Y. Moderation of the Relationship Between Size of Government and Corruption by Democracy. J Knowl Econ 9, 1210–1223 (2018). https://doi.org/10.1007/s13132-016-0410-8

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