The effects of federal regulations on corruption in U.S. States |
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| Institution: | 1. Department of Economics, Illinois State University, Normal, IL, 61790-4200, USA;2. Department of Economics, Cankaya University, 06790, Etimesgut, Ankara, Turkey;1. Department of Environmental Economics and Management, The Hebrew University of Jerusalem, Israel;2. Department of Environmental Economics and Management and the Center for Agricultural Economic Research, The Hebrew University of Jerusalem, Israel;1. Etla Economic Research, Finland;2. Ministry of Economic Affairs and Employment, Finland;3. University of Helsinki, Finland |
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| Abstract: | Using the newly constructed Federal Regulation and State Enterprise Index (FRASE Index) to measure the federal regulations and the existing Corruption Convictions Index (CCI), we investigate the effects of federal regulations on corruption in U.S. states. Controlling for several demographic and economic variables including the Fraser Institute’s Economic Freedom Index (EFI), which measures the size and scope of government in U.S. states, we find a positive and statistically significant relationship between federal regulations and corruption. Our findings have important policy implications. A 1 standard deviation increase in FRASE Index causes CCI to increase by approximately 0.5 standard deviations. Standardized coefficient of EFI is also approximately equal to 0.5. In other words, it is possible to mitigate the effects of regulations at the federal level by reducing the size and the scope of the government at the state level. |
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| Keywords: | FRASE Index Corruption Economic freedom U S States D73 H11 K20 L51 R10 |
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