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Decentralization and Corruption: Evidence from U.S. Federal Transfer Programs

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Author Info
 Fisman, Raymond
Gatti, Roberta

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Abstract

While some recent evidence suggests that more decentralization is associated with reduced corruption, no empirical work has examined whether different types of decentralization have differential effects on corruption. The theoretical literature has emphasized that expenditure decentralization will only be effective if accompanied by the devolution of revenue generation to local governments. In this paper we examine this hypothesis empirically, by studying the mismatch between revenue generation and expenditure in U.S. states. Larger federal transfers are associated with higher rates of conviction for abuse of public office, supporting the theory that soft-budget constraints created by federal transfers are potentially problematic. Copyright 2002 by Kluwer Academic Publishers

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Publisher Info
Article provided by Springer in its journal Public Choice.

Volume (Year): 113 (2002)
Issue (Month): 1-2 (October)
Pages: 25-35
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Handle: RePEc:kap:pubcho:v:113:y:2002:i:1-2:p:25-35

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  1. Anwar Shah & Theresa Thompson & Heng-fu Zou, 2004. "Decentralising the public sector: The Impact of Decentralisation on Service Delivery, Corruption, Fiscal Management and Growth in Developing and Emerging Market Economies: A Synthesis of Empirical Evi," CESifo DICE Report, Ifo Institute for Economic Research at the University of Munich, vol. 2(1), pages 10-14, October. [Downloadable!]
  2. Pranab Bardhan & Dilip Mookherjee, 2005. "Decentralization, Corruption and Government Accountability: An Overview," Boston University - Department of Economics - The Institute for Economic Development Working Papers Series dp-152, Boston University - Department of Economics. [Downloadable!]
    Other versions:
  3. Hatfield, John, 2006. "Federalism, Taxation, and Economic Growth," Research Papers 1929, Stanford University, Graduate School of Business. [Downloadable!]
  4. Andreas Kyriacou & Oriol Roca sagalés, 2009. "Fiscal descentralization and the quality of government: evidence from panel data," Hacienda Pública Española, IEF, vol. 189(2), pages 131-155, June. [Downloadable!]
  5. Oguzhan C. Dincer & Peter J. Lambert, 2006. "Taking care of your own: Ethnic and religious heterogeneity and income inequality," Working Papers 48, ECINEQ, Society for the Study of Economic Inequality. [Downloadable!]
  6. Edward L. Glaeser & Raven Saks, 2004. "Corruption in America," NBER Working Papers 10821, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  7. Odd-Helge Fjeldstad, 2004. "Decentralisation and corruption," CMI Working Papers WP 2004: 10, CMI (Chr. Michelsen Institute), Bergen, Norway. [Downloadable!]
  8. Deininger, Klaus & Mpuga, Paul, 2004. "Does greater accountability improve the quality of delivery of public services? Evidence from Uganda," Policy Research Working Paper Series 3277, The World Bank. [Downloadable!]
  9. Christopher J. Ellis & Oguzhan C. Dincer & Glenn R. Waddell, 2005. "Corruption, Decentralization and Yardstick Competition," University of Oregon Economics Department Working Papers 2005-5, University of Oregon Economics Department, revised 01 Jan 2006. [Downloadable!]
  10. Christian Lessmann & Gunther Markwardt, 2009. "One Size Fits All? Decentralization, Corruption, and the Monitoring of Bureaucrats," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  11. James E. Alt & David Dreyer Lassen, 2008. "Inequality and Corruption: Evidence from US States," EPRU Working Paper Series 08-02, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics. [Downloadable!]
  12. Edward Timmons & Robert Thornton, 2008. "The Effects of Licensing on the Wages of Radiologic Technologists," Journal of Labor Research, Springer, vol. 29(4), pages 333-346, December. [Downloadable!] (restricted)
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