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Enforcement and Public Corruption: Evidence from US States

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Author Info

  • James E. Alt

    (Department of Government, Harvard University)

  • David Dreyer Lassen

    (Department of Economics, University of Copenhagen)

Abstract

We use high-quality panel data on corruption convictions, new panels of assistant U.S. attorneys and relative public sector wages, and careful attention to the consequences of modeling endogeneity to estimate the impact of prosecutorial resources on criminal convictions of those who undertake corrupt acts. Consistent with “system capacity” arguments, we find that greater prosecutor resources result in more convictions for corruption, other things equal. We find more limited, recent evidence for the deterrent effect of increased prosecutions. We control for and confirm in a panel context the effects of many previously identified correlates and causes of corruption. By explicitly determining the allocation of prosecutorial resources endogenously from past corruption convictions and political considerations, we show that this specification leads to larger estimates of the effect of resources on convictions. The results are robust to various ways of measuring the number of convictions as well as to various estimators.

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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 2010-08.

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Length: 36 pages
Date of creation: Jul 2010
Date of revision:
Handle: RePEc:kud:epruwp:10-08

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Related research

Keywords: corruption; rent seeking; enforcement; efficiency wage; public sector wages; system capacity;

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References

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  1. Paldam, Martin, 2002. "The cross-country pattern of corruption: economics, culture and the seesaw dynamics," European Journal of Political Economy, Elsevier, vol. 18(2), pages 215-240, June.
  2. John Knowles & Nicola Persico & Petra Todd, 2001. "Racial Bias in Motor Vehicle Searches: Theory and Evidence," Journal of Political Economy, University of Chicago Press, vol. 109(1), pages 203-232, February.
  3. Torsten Persson & Guido Tabellini & Francesco Trebbi, . "Electoral Rules and Corruption," Working Papers 182, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
  4. Eric Rasmusen & Manu Raghav, & Mark Ramseyer, 2008. "Convictions versus Conviction Rates: The Prosecutor’s Choice," Working Papers 2008-16, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
  5. Di Tella, Rafael & Schargrodsky, Ernesto, 2003. "The Role of Wages and Auditing during a Crackdown on Corruption in the City of Buenos Aires," Journal of Law and Economics, University of Chicago Press, vol. 46(1), pages 269-92, April.
  6. Van Rijckeghem, Caroline & Weder, Beatrice, 2001. "Bureaucratic corruption and the rate of temptation: do wages in the civil service affect corruption, and by how much?," Journal of Development Economics, Elsevier, vol. 65(2), pages 307-331, August.
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  13. James E. Alt & David Dreyer Lassen, 2005. "Political and Judicial Checks on Corruption: Evidence from American State Governments," EPRU Working Paper Series 05-12, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
  14. Rafael La Porta & Florencio Lopez-de-Silanes & Cristian Pop-Eleches & Andrei Shleifer, 2004. "Judicial Checks and Balances," Journal of Political Economy, University of Chicago Press, vol. 112(2), pages 445-470, April.
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Citations

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Cited by:
  1. Filipe R Campante & Quoc-Anh Do, 2013. "Isolated Capital Cities, Accountability and Corruption Evidence from US States: Evidence from US States," Sciences Po Economics Discussion Papers 2013-01, Sciences Po Departement of Economics.
  2. Torija, P., 2013. "Do Politicians Serve the One Percent? Evidence in OECD Countries," CITYPERC Working Paper Series 2013-04, Department of International Politics, City University London.
  3. Quoc-Anh Do & Filipe R. Campante, 2013. "Isolated Capital Cities, Accountability and Corruption: Evidence from US States," Sciences Po publications 12, Sciences Po.
  4. Hamilton, Alexander, 2013. "Small is beautiful, at least in high-income democracies: the distribution of policy-making responsibility, electoral accountability, and incentives for rent extraction," Policy Research Working Paper Series 6305, The World Bank.
  5. Wadho, Waqar Ahmed, 2009. "Steal If You Need. Capitulation Wages with Endogenous Monitoring," MPRA Paper 37839, University Library of Munich, Germany.
  6. Guenther G. Schulze & Bambang Suharnoko Sjahrir & Nikita Zakharov, 2013. "Corruption in Russia," Discussion Paper Series 22, Department of International Economic Policy, University of Freiburg, revised Apr 2013.

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