TANMIYAT AL-RAFIDAIN

Abstract

Abstract
This paper empirically examines the impact of corruption on government economic performance (the amount and the allocation of public spending, tax revenue and structure, and the quality of government services) in Middle East and Central Asia countries. Applying the method of pooling cross sectional time series Data for the period 2004-2007, it is highlighted two different effects of corruption on sectional public expenditure: a "quantity effect" on the total amount of real spending and an "allocation effect" on the budget structure. It is found first that high level corruption reduce the total amount of real public expenditure, and corrupt its structure. In the same direction it differentiated two effects of corruption on tax revenue: a "tax revenue effect" on the amount of tax revenue and "tax structure effect" on the tax structure. Furthermore, it is investigated the relation between corruption the quality of government services by applying cross sectional data for 2006. It is concluded that corruption decreases the quality of public expenditure and the low level corruption lead to improve government services, but high level corruption affect government services negatively.

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