Author

  • Ahmad Jafari Samimi

    • Islamic Azad University of Firozkuh Branch, Firozkuh, Iran
    • Iran, Islamic Republic of

  • Maryam Abedini

    • Islamic Azad University of Firozkuh Branch, Firozkuh, Iran
    • Iran, Islamic Republic of

Abstract

Corruption usually harms all aspects of macroeconomic performances of all countries around the World especially the developing world. The purpose of the present paper is to investigate the impact of corruption on inflation tax in MENA countries. In a previous paper1 , we used Corruption Perception Index (CPI) as a definition of corruption and applied Friedman, International Bank and Vito Tanzi definitions for inflation tax. We concluded that, there is a positive and significant relationship between corruption and inflation tax. In this paper, we used two different indices for corruption; Corruption Perception Index (CPI) and Control of Corruption Index (CCI) to investigate the sensitivity to different definition of corruption. To do so, we have concentrated on a sample of 17 developing countries from Middle East and North Africa countries for which the necessary data were available for the period 2003-2008. We have used two different indices for corruption; Corruption Perception Index (CPI) and Control of Corruption Index (CCI). Our findings based on panel data (we used unbalanced panel data because of missing data) regression models indicate that in general a positive relationship between corruption and inflation tax exists. In other words, the higher is the corruption the higher will be the inflation tax. Therefore, according to the results, governments have to try to use policies reducing corruption.

Keywords

References

  • Acemoglu, D. (1995). Reward Structures and the Allocation of Talent. European Economic Review, 39: 17-33.
  • Alesina, A., and Summers, L. (1993). Central Bank Independence and Macroeconomic Performance: Some Comparative Evidence. Journal of Money, Credit and Banking , 25(2), 151-162.
  • Alesina, A. and Perotti, R. (1995). The Political Economy of Budget Deficits. IMF Staff Papers , 42: 1-31.
  • Al-Marhubi, F. A. (2002). Corruption and Inflation. Economic Letters , 66: 199-202.
  • Blackburn, K., Bose, N. and Haque. E.M. (2006). The Incidence and Persistence of Corruption in Economic Development. Journal of Economic Dynamics and Control , 30: 2447-2467.
  • Blackburn, K., and Forgues-Puccio. G. F. (2007). Distribution and Development in a Model of Misgovernance. European Economic Review , 51(6), 1534-1563.
  • Blackburn, K. and Sarmah, R. (2008). Corruption, Development and Demography. Economics of Governance , 9: 341-362.
  • Blackburn, K., Neanidis, C. K. and Haque, M. (2009). Corruption, Seignorage and Growth: Theory and Evidence. Center of Growth and Business Cycles Research, Economic Studies, University of Manchester.
  • Fischer, S., Sahay, R. and Vegh, C. (2002). Modern Hyper and High Inflations. Journal of Economic Literature , 40(3): 837-880.
  • Ghura, D. (1998). Tax Revenue in Sub-Saharan Africa: Effect of Economic Policies and Corruption. Working Paper No.135, International Monetary Fund.
  • Gupta, S., de Mello, L., Sharan, R., (2001). Corruption and Military Spending. European Journal of Political Economy , 17: 749-777.
  • Gupta S., Davoodi, H. and Tiongson E. (2000). Corruption and the Provision of Health Care and Education Services. IMF Working Paper, 00/116.
  • Hall, E. R. and Jones, I. C. (1999). Why Do Some Countries Produce So Much More Output Per Worker Than Others? The Quarterly Journal of Economics , 114(1): 83-116.
  • Imam, P. A. and Jacobs, D. F. (2007). Effect of Corruption on Tax Revenues in the Middle East. Working Paper No. 270, International Monetary Fund.
  • Mauro, P. (1995). Corruption and Growth. The Quarterly Journal of Economics , 110(3): 681-712.
  • North, D. C. (1990). Institutions, Institutional Change, and Economic Performance, Cambridge: Cambridge University Press.
  • Pellegrini, L., and Gerlagh, R. (2004). Corruption’s Effect on Growth and its Transmission Channels. Kyklos , 57(3): 429-456.
  • Phelps, E. (1973). Inflation in the Theory of Public Finance. Swedish Journal of Economics, 75: 67-82.
  • Reinikka, R., and Svensson, J. (2005). Fighting Corruption to Improve Schooling: Evidence from a Newspaper Campaign in Uganda. Journal of European Economic Association, 3: 259-267.
  • Svensson, J. (2005). Eight Questions about Corruption. Journal of Economic Perspectives , 19(3): 19-42.
  • Tanzi, V., and Davoodi. H. R. (2000). Corruption, Growth, and Public Finances. Working Paper No. 182, International Monetary Fund.
  • Tanzi, V., and Davoodi. H. R. (1997). Corruption, Public Investment, and Growth. Working Paper No. 139, International Monetary Fund.
  • Wei, S. (2000). How Taxing is Corruption on International Investors?" Review of Economics and Statistics , 82: 1-11.

Downloads

No downloads have been recorded for this article yet. Figures appear here once readers begin downloading the full text.

How to Cite

Samimi, A. J., & Abedini, M. (2011). Corruption and Inflation Tax in the Middle East and North Africa (MENA) Region: Sensitivity to Definition of Corruption. Journal of Social and Development Sciences, 1(2), 67-73. https://doi.org/10.22610/jsds.v1i2.629

Share this article

License

Copyright (c) 2011 Ahmad Jafari Samimi, Maryam Abedini (Author)

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

Author (s) should affirm that the material has not been published previously. It has not been submitted and it is not under consideration by any other journal. At the same time author (s) need to execute a publication permission agreement to assume the responsibility of the submitted content and any omissions and errors therein. After submission of revised paper in the light of suggestions of the reviewers, the editorial team  edits and formats manuscripts to bring uniformity and standardization in published material.

This work will be licensed under Creative Commons Attribution 4.0 International (CC BY 4.0) and under condition of the license, users are free to read, copy, remix, transform, redistribute, download, print, search or link to the full texts of articles and even build upon their work as long as they credit the author for the original work. Moreover, as per journal policy author (s) hold and retain copyrights without any restrictions.

Keywords

Section

Research Paper

Published in

Vol. 1 No. 2 (2011) Macro Shocks, Banking & Enterprise View issue contents

Published

2011-03-15

Submissions

Have research to publish? Journal of Social and Development Sciences welcomes submissions.

Make a Submission