New paper: Does Greater Regulatory Burden Lead to More Corruption?
The paper documents that regulation seems to create opportunities for public officials to extract bribes. It finds that the bribery rate is higher the higher the cost of regulation.
Briber is measured as a percentage of firm sales, so a 1% increase in regulation will cost a firm with revenue of $1M about $3,000 in bribes to avoid.
SOLUTION: ."..deregulation offers a simple way to combat corruption."
HT: MarginalRevolution.com
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