Header and navigation menu

Page content

Public Corruption and Public Debt: Some Empirical Evidence

Recent theoretical literature related high public debt to the presence of rent-seeking activities by the government (Bataglini and Coate, 2008, Yared, 2010). This paper tests the hypothesis that higher public corruption leads to higher public debt using a panel of OECD countries. The estimates, controlled for the countries' and time fixed effects, support the importance of public corruption in determining country's public debt.