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Submitted by dorsati madani on
Dear anonymous commentator, thank you for your comments and for not wanting us to fail the econometrics 101 presentation. As we had stated in the title and first few paragraphs there is a positive and strong CORRELATION between corruption and BE. So we stand corrected on paragraph 4, where the same relationship holds. The data from figure 1 comes from Kauffman indicators up to 2008 (available to the public). The figure just shows a positive correlation between corruption and restrictive regulation data. Separate from figure 1, which is descriptive, our preliminary analysis suggests that controlling for GDP per capita, the DB indicators are still positively associated with corruption. This relationship still holds if we apply country fixed effects.