Taxation, Corruption and the Exchange Rate Regime

The paper analyzes the relation between institutional quality, such as corruption, in a country and its monetary regime. It is shown that a credibly fixed exchange rate to a low inflation country, like a currency board, can reduce corruption and improve the fiscal system. A monetary union, howev...

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Veröffentlicht in:MAGKS - Joint Discussion Paper Series in Economics (Band 11-2009)
1. Verfasser: Hefeker, Carsten
Format: Arbeit
Sprache:Englisch
Veröffentlicht: Philipps-Universität Marburg 2009
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Zusammenfassung:The paper analyzes the relation between institutional quality, such as corruption, in a country and its monetary regime. It is shown that a credibly fixed exchange rate to a low inflation country, like a currency board, can reduce corruption and improve the fiscal system. A monetary union, however, has ambiguous effects. I find that that there is convergence between countries with regard to the level of corruption.
ISSN:1867-3678
DOI:10.17192/es2023.0225