The Impact of Institutional Quality and Reforms on Control of Corruption: An Empirical Evidence through Decentralization

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DOI:

https://doi.org/10.59926/jodprp.vol08/04

Keywords:

Fiscal Decentralization, Corruption, Pakistan, Institutional Quality, FMOLS

Abstract

This study analyzed the viability of fiscal devolution for controlling state corruption in Pakistan. Specifically, the study focused on investigating the role of different types and magnitude of fiscal decentralization for controlling corruption after accounting for institutional quality and fiscal reforms. The results from FMOLS from 1976-2020 indicated a non-linear relationship between fiscal decentralization and corruption and implied that decentralization worsens the transparency of state affairs at the initial stages and improves it later. The findings suggested that composite decentralization should be considered instead of revenue and spending decentralization separately and that a minimum of 57 percent composite decentralization is necessary for successful corruption control. The findings also postulated that institutional structure comprising of low institutional quality and non-transparent fiscal reforms did not substantiate the benefits of fiscal decentralization for controlling state corruption. The study recommended that fiscal devolution be coordinated with the economy's overall institutional framework to realize the promised benefits of devolution.  

JEL Classification: D73; E6

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Published

2024-12-31

How to Cite

Yasmin, B., & Tufail, S. (2024). The Impact of Institutional Quality and Reforms on Control of Corruption: An Empirical Evidence through Decentralization. Journal of Development Policy Research & Practice (JoDPRP), 8(1). https://doi.org/10.59926/jodprp.vol08/04

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