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Corruption, decentralization and yardstick competition

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  • Oguzhan Dincer
  • Christopher Ellis

    ()

  • Glen Waddell

Abstract

Several empirical studies have found a negative relationship between corruption and the decentralization of the powers to tax and spend. In this paper we explain this phenomenon using a model of Yardstick Competition. Using data on federal corruption-related convictions in U.S. states we propose and test a spatial autoregressive model of corruption, providing new evidence in support of the theoretical findings.

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File URL: http://hdl.handle.net/10.1007/s10101-009-0067-x
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Bibliographic Info

Article provided by Springer in its journal Economics of Governance.

Volume (Year): 11 (2010)
Issue (Month): 3 (June)
Pages: 269-294

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Handle: RePEc:spr:ecogov:v:11:y:2010:i:3:p:269-294

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Related research

Keywords: Corruption; Decentralization; Yardstick competition; Spatial autoregression; H20; H29;

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References

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  1. Besley, Timothy & Smart, Michael, 2007. "Fiscal restraints and voter welfare," Journal of Public Economics, Elsevier, vol. 91(3-4), pages 755-773, April.
  2. Fisman, Raymond & Gatti, Roberta, 2000. "Decentralization and corruption - evidence across countries," Policy Research Working Paper Series 2290, The World Bank.
  3. Imbens, Guido W & Angrist, Joshua D, 1994. "Identification and Estimation of Local Average Treatment Effects," Econometrica, Econometric Society, vol. 62(2), pages 467-75, March.
  4. Dincer, Oguzhan C., 2008. "Ethnic and religious diversity and corruption," Economics Letters, Elsevier, vol. 99(1), pages 98-102, April.
  5. Salmon, Pierre, 1987. "Decentralisation as an Incentive Scheme," Oxford Review of Economic Policy, Oxford University Press, vol. 3(2), pages 24-43, Summer.
  6. Lazear, Edward P & Rosen, Sherwin, 1981. "Rank-Order Tournaments as Optimum Labor Contracts," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 841-64, October.
  7. Fisman, Raymond & Gatti, Roberta, 2002. " Decentralization and Corruption: Evidence from U.S. Federal Transfer Programs," Public Choice, Springer, vol. 113(1-2), pages 25-35, October.
  8. Fredriksson, Per G. & List, John A. & Millimet, Daniel L., 2003. "Bureaucratic corruption, environmental policy and inbound US FDI: theory and evidence," Journal of Public Economics, Elsevier, vol. 87(7-8), pages 1407-1430, August.
  9. Maarten Allers & J. Elhorst, 2005. "Tax Mimicking and Yardstick Competition Among Local Governments in the Netherlands," International Tax and Public Finance, Springer, vol. 12(4), pages 493-513, August.
  10. Glaeser, Edward L. & Saks, Raven E., 2006. "Corruption in America," Journal of Public Economics, Elsevier, vol. 90(6-7), pages 1053-1072, August.
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Citations

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Cited by:
  1. Pierre Salmon, 2013. "Decentralization and growth: what if the cross-jurisdiction approach had met a dead end?," Constitutional Political Economy, Springer, vol. 24(2), pages 87-107, June.
  2. Christian Leßmann & Gunther Markwardt, 2010. "Föderalismus und Korruption - ist Dezentralisierung ein geeignetes Mittel zur Korruptionsbekämpfung?," ifo Dresden berichtet, Ifo Institute for Economic Research at the University of Munich, vol. 17(04), pages 43-48, 08.
  3. Michael Breen & Robert Gillanders, 2011. "Corruption, Institutions and Regulation," Working Papers 201106, School Of Economics, University College Dublin.
  4. Nadia Fiorino & Emma Galli & Fabio Padovano, 2012. "Do Fiscal Decentralization and Government Fragmentation Affect Corruption In Different Ways? Evidence from a Panel Data Analysis," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1217, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
  5. Lessmann, Christian & Markwardt, Gunther, 2008. "One size fits all? Decentralization, corruption, and the monitoring of bureaucrats," Dresden Discussion Paper Series in Economics 14/08, Dresden University of Technology, Faculty of Business and Economics, Department of Economics.
  6. Simona Fabrizi & Steffen Lippert, 2012. "Corruption and the Public Display of Wealth," Working Papers 1202, University of Otago, Department of Economics, revised Jun 2012.
  7. Shih-Ying Wu & Mei-Jane Teng, 2012. "Fiscal decentralization and multinational firms’ ownership: evidence from China," Economics of Governance, Springer, vol. 13(3), pages 237-262, September.
  8. 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.

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