Politická ekonomie 2011, 59(3):310-328 | DOI: 10.18267/j.polek.793

Vazba korupce a hospodářské svobody na veřejné finance a investice nových členů EU

Jan Hanousek, Evžen Kočenda
1 CERGE-EI, Karlova univerzita a Akademie věd, Praha, Česká republika; Anglo-American University, Prague; The William Davidson Institute, Michigan; a CEPR, London.
2 CERGE-EI, Karlova univerzita a Akademie věd, Praha, Česká republika; Anglo-American University, Prague; CESifo, Munich; OEI, Regensburg; The William Davidson Institute, Michigan; CEPR, London a Euro Area Business Cycle Network.

Corruption and Economic Freedom Links to Public Finance and Investment in New EU Members

We analyze corruption and economic freedom links to public finance and investment in new EU members. In terms of the public investment our results show that improvement in economic freedom is linked to increases in public investment while lowering of corruption is linked with increase or decrease with respect to public investment. As a complementary finding we show that increases in public investment are also linked with the ambiguous effect. In case of public finance our estimates suggest that debt usually decreases as economic regulation goes down while the effect on budget deficit goes both ways. On other hand, as corruption declines both budget deficit and debt decrease. Based on our results we generalize that measures taken to lower corruption and economic regulation should lead to improvements in fiscal position in most of the new EU member states.

Keywords: macroeconomic policy, economic freedom, corruption, public finance, public investment, convergence and integration in the EU, fiscal reforms, new EU members
JEL classification: E61, E62, F42, H50, H60, O11

Published: June 1, 2011  Show citation

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Hanousek, J., & Kočenda, E. (2011). Corruption and Economic Freedom Links to Public Finance and Investment in New EU Members. Politická ekonomie, 59(3), 310-328. doi: 10.18267/j.polek.793
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