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Corruption in America

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  • Edward L. Glaeser
  • Raven Saks

Abstract

We use a data set of federal corruption convictions in the U.S. to investigate the causes and consequences of corruption. More educated states, and to a less degree richer states, have less corruption. This relationship holds even when we use historical factors like education in 1928 or Congregationalism in 1890, as instruments for the level of schooling today. The level of corruption is weakly correlated with the level of income inequality and racial fractionalization, and uncorrelated with the size of government. There is a weak negative relationship between corruption and employment and income growth. These results echo the cross-country findings, and support the view that the correlation between development and good political outcomes occurs because more education improves political institutions.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 10821.

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Date of creation: Oct 2004
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Publication status: published as Glaeser, Edward L. and Raven E. Saks. "Corruption In America," Journal of Public Economics, 2006, v90(6-7,Aug), 1053-1072.
Handle: RePEc:nbr:nberwo:10821

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References

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  1. Edward L. Glaeser & Albert Saiz, 2003. "The Rise of the Skilled City," Harvard Institute of Economic Research Working Papers 2025, Harvard - Institute of Economic Research.
  2. Daniel Berkowitz & Karen Clay, . "Initial Conditions, Institutional Dynamics and Economic Performance: Evidence from the American States," American Law & Economics Association Annual Meetings 1083, American Law & Economics Association.
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  4. Rappaport, Jordan & Sachs, Jeffrey D, 2003. " The United States as a Coastal Nation," Journal of Economic Growth, Springer, vol. 8(1), pages 5-46, March.
  5. Svensson, Jakob, 2002. "Who Must Pay Bribes and How Much? Evidence from a cross-section of firms," Seminar Papers 713, Stockholm University, Institute for International Economic Studies.
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  7. 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.
  8. 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.
  9. Edward L. Glaeser & Andrei Shleifer, 2003. "The Rise of the Regulatory State," Journal of Economic Literature, American Economic Association, vol. 41(2), pages 401-425, June.
  10. Easterly, William & Baqir, Reza & Alesina, Alberto, 2000. "Redistributive Public Employment," Scholarly Articles 4553013, Harvard University Department of Economics.
  11. McMillan, John & Zoido, Paolo, 2004. "How to Subvert Democracy: Montesinos in Peru," CEPR Discussion Papers 4361, C.E.P.R. Discussion Papers.
  12. Rose-Ackerman, Susan, 1975. "The economics of corruption," Journal of Public Economics, Elsevier, vol. 4(2), pages 187-203, February.
  13. Edward L. Glaeser & Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer, 2004. "Do Institutions Cause Growth?," Journal of Economic Growth, Springer, vol. 9(3), pages 271-303, 09.
  14. Edward L. Glaeser & Claudia Goldin, 2004. "Corruption and Reform: An Introduction," NBER Working Papers 10775, National Bureau of Economic Research, Inc.
  15. Mauro, Paolo, 1995. "Corruption and Growth," The Quarterly Journal of Economics, MIT Press, vol. 110(3), pages 681-712, August.
  16. Isaac Ehrlich & Francis T. Lui, 1999. "Bureaucratic Corruption and Endogenous Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 107(S6), pages S270-S293, December.
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Citations

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Cited by:
  1. Russell S. Sobel & Nabamita Dutta & Sanjukta Roy, 2010. "Does Cultural Diversity Increase The Rate Of Entrepreneurship?," Working Papers 10-12, Department of Economics, West Virginia University.
  2. 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.
  3. Olken, Benjamin A., 2006. "Corruption and the costs of redistribution: Micro evidence from Indonesia," Journal of Public Economics, Elsevier, vol. 90(4-5), pages 853-870, May.
  4. R. Alison Felix & James R. Hines, Jr., 2011. "Who offers tax-based business development incentives?," Research Working Paper RWP 11-05, Federal Reserve Bank of Kansas City.
  5. Benjamin Olken, 2006. "Corruption perceptions vs. corruption reality," Natural Field Experiments 00318, The Field Experiments Website.
  6. Edward L. Glaeser & Claudia Goldin, 2006. "Corruption and Reform: Introduction," NBER Chapters, in: Corruption and Reform: Lessons from America's Economic History, pages 2-22 National Bureau of Economic Research, Inc.
  7. Dincer, Oguzhan C., 2008. "Ethnic and religious diversity and corruption," Economics Letters, Elsevier, vol. 99(1), pages 98-102, April.
  8. Thum, Marcel, 2004. "Korruption," Dresden Discussion Paper Series in Economics 11/04, Dresden University of Technology, Faculty of Business and Economics, Department of Economics.
  9. 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.
  10. Marcel Thum, 2005. "Korruption und Schattenwirtschaft," Ifo Working Paper Series Ifo Working Papers No.12, Ifo Institute for Economic Research at the University of Munich.
  11. Kodila Tedika, Oasis, 2012. "Empirical Survey on the Causes of the Corruption
    [Aper├žu empirique sur les causes de la corruption]
    ," MPRA Paper 41484, University Library of Munich, Germany.

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