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The Political Economy of Institutions and Corruption in American States

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  • James E. Alt
  • David Dreyer Lassen

Abstract

Theoretically, this paper draws on political agency theory to formulate hypotheses. Empirically, it shows that political institutions have a role in explaining the prevalence of political corruption in American states. In the states, a set of democracies where the rule of law is relatively well established and the confounding effects of differing electoral systems and regimes are absent, institutional variables relating to the openness of the political system inhibit corruption. That is, other things equal, the extent to which aspiring politicians can enter and gain financial backing, and to which voters can focus their votes on policies and thereby hold incumbent politicians accountable for policy outcomes and find substitutes for them if dissatisfied with those outcomes, reduce corruption as a general problem of agency. These institutional effects are estimated in the presence of controls for variables representing other approaches.

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Bibliographic Info

Paper provided by Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics in its series EPRU Working Paper Series with number 02-16.

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Date of creation: Nov 2002
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Handle: RePEc:kud:epruwp:02-16

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  1. Brunetti, Aymo & Weder, Beatrice, 2003. "A free press is bad news for corruption," Journal of Public Economics, Elsevier, vol. 87(7-8), pages 1801-1824, August.
  2. Ades, Alberto & Di Tella, Rafael, 1997. "National Champions and Corruption: Some Unpleasant Interventionist Arithmetic," Economic Journal, Royal Economic Society, vol. 107(443), pages 1023-42, July.
  3. Johnson, Simon & Kaufmann, Daniel & Zoido-Lobaton, Pablo, 1998. "Regulatory Discretion and the Unofficial Economy," American Economic Review, American Economic Association, vol. 88(2), pages 387-92, May.
  4. John Ferejohn, 1986. "Incumbent performance and electoral control," Public Choice, Springer, vol. 50(1), pages 5-25, January.
  5. Robert E. Hall & Charles I. Jones, 1999. "Why Do Some Countries Produce So Much More Output Per Worker Than Others?," The Quarterly Journal of Economics, MIT Press, vol. 114(1), pages 83-116, February.
  6. Besley, Timothy J. & Coate, Stephen, 2001. "Issue Unbundling via Citizens' initiatives," CEPR Discussion Papers 2857, C.E.P.R. Discussion Papers.
  7. Bryan W Husted, 1999. "Wealth, Culture, and Corruption," Journal of International Business Studies, Palgrave Macmillan, vol. 30(2), pages 339-359, June.
  8. Goel, Rajeev K & Nelson, Michael A, 1998. " Corruption and Government Size: A Disaggregated Analysis," Public Choice, Springer, vol. 97(1-2), pages 107-20, October.
  9. Mauro, Paolo, 1995. "Corruption and Growth," The Quarterly Journal of Economics, MIT Press, vol. 110(3), pages 681-712, August.
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