Isolated Capital Cities, Accountability and Corruption Evidence from US States: Evidence from US States

We show that isolated capital cities are robustly associated with greater levels of corruption across US states, in line with the view that spatial distance between citizens and the seat of political power reduces accountability, and in contrast with the alternative hypothesis that keeping distance between the capital and major economic interests might decrease the risk of political capture. In particular, this stylized fact holds when we use the location of a state’s centroid and the spatial distribution of land suitability as sources of exogenous variation for the isolation of the capital city. We then show direct evidence that different mechanisms for holding state politicians accountable are indeed affected by the spatial distribution of population: newspapers provide greater coverage of state politics when their audiences are more concentrated around the capital, voters are less knowledgeable and interested in state politics when they are far from the capital, and voter turnout in state elections is greater in places that are closer to the capital. We find that the role of media accountability seems particularly important in explaining the connection between isolated capitals and corruption. We also find evidence that there is more money in state-level political campaigns in those states with isolated capitals, again contrary to the capture hypothesis. Finally, we provide some evidence that these patterns are associated with lower levels of public good spending and outcomes.