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PDF, GB, 139 p., 796 Ko - Femise

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fall in corruption. This fall is quite large, especially for Syria and Algeria. The improvement<br />

would move these countries almost to the level of corruption observed currently in Turkey<br />

and the improvement in corruption level in Turkey would move it to the level of corruption<br />

observed in the Czech Republic. Figure 3 shows the levels of corruption before and after<br />

proposed deregulation to the level of 8 NMS mean plus the current mean of corruption in the<br />

two regions.<br />

Figure 3 Current versus predicted level of corruption<br />

0.80<br />

0.30<br />

-0.20<br />

-0.70<br />

-1.20<br />

ALGERIA<br />

EGYPT<br />

ISRAEL<br />

JORDAN<br />

LEBANON<br />

MOROCCO<br />

SYRIA<br />

TUNISIA<br />

TURKEY<br />

WEST BANK<br />

121<br />

CZECH REPUBLIC<br />

ESTONIA<br />

HUNGARY<br />

Current level of corruption<br />

Predicted level after deregulation<br />

NMS Mean<br />

MENA Mean<br />

Source: Own calculation based on Control of Corruption Index by Kaufmann, Kraay and Mastruzzi (2006).<br />

"Governance Matters V: Governance Indicators for 1996-2005". World Bank Policy Research September 2006<br />

However, Israel and Tunisia have a lower level of regulation than the 8 New Member States'<br />

average (shown in outlines in figure 3). As a result, a change in the level of regulation to the<br />

NMS8 level would mean an effective increase in regulation. Therefore, this would increase<br />

corruption instead of decreasing it. This result seems plausible too, though it is very important<br />

to remember, that post-communist countries suffer from legacies of the now obsolete system<br />

of central planning. By definition, central planning involved vast and substantial direct<br />

governmental intervention in economic decision-making. Therefore, these countries have a<br />

very high level of regulation even though liberalization is still undergoing. This is not in any<br />

way connected to the bureaucratic rigidities often ridiculed by opponents of the European<br />

LATVIA<br />

LITHUANIA<br />

POLAND<br />

SLOVAK REPUBLIC<br />

SLOVENIA

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