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Enforcement and Public Corruption: Evidence from US States

Author

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  • 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.

Suggested Citation

  • James E. Alt & David Dreyer Lassen, 2010. "Enforcement and Public Corruption: Evidence from US States," EPRU Working Paper Series 2010-08, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
    • Handle: RePEc:kud:epruwp:10-08
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    References listed on IDEAS

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    Cited by:

    1. Filipe R. Campante & Quoc-Anh Do, 2014. "Isolated Capital Cities, Accountability, and Corruption: Evidence from US States," American Economic Review, American Economic Association, vol. 104(8), pages 2456-2481, August.
    2. repec:hal:spmain:info:hdl:2441/dambferfb7dfprc9lj6bo200k is not listed on IDEAS
    3. 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.
    4. IONESCU, Luminiţa & CALOIAN, Florentin, 2014. "Bureaucracy And Corruption In Public Sector Accounting," Annals of Spiru Haret University, Economic Series, Universitatea Spiru Haret, vol. 5(1), pages 17-23.
    5. Günther G. Schulze & Bambang Suharnoko Sjahrir & Nikita Zakharov, 2016. "Corruption in Russia," Journal of Law and Economics, University of Chicago Press, vol. 59(1), pages 135-171.
    6. repec:hal:wpspec:info:hdl:2441/dambferfb7dfprc9lj6bo200k is not listed on IDEAS
    7. repec:hal:spmain:info:hdl:2441/6ggbvnr6munghes9ocq36eaai is not listed on IDEAS
    8. Filipe 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.
    9. 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.
    10. repec:hal:spmain:info:hdl:2441/4tc33icveb94nokk2rd2ettg0k is not listed on IDEAS
    11. Wadho, Waqar Ahmed, 2009. "Steal If You Need. Capitulation Wages with Endogenous Monitoring," MPRA Paper 37839, University Library of Munich, Germany.

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    More about this item

    Keywords

    corruption; rent seeking; enforcement; efficiency wage; public sector wages; system capacity;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • H83 - Public Economics - - Miscellaneous Issues - - - Public Administration
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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