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Government fragmentation versus fiscal decentralization and corruption


  • Rajeev Goel


  • Michael Nelson



This research adds to the literature on the nexus between government and corruption by examining further the influence of government decentralization on corruption. Previous research has focused primarily on fiscal decentralization. We bring additional evidence to bear for the United States by addressing whether the structure of local governments – measured both in terms of the scope of services offered and the size of the population served – has a bearing on corruption within the state. Results show that government decentralization does not necessarily reduce corruption – the type of decentralization matters. Specifically, we find that more general-purpose governments consistently contribute to corruption. In contrast, the effect of special-purpose governments on corruption is mixed. The findings uniquely flush out the tension between fiscal decentralization and fragmental local government structures in terms of impacts on corruption. Beyond this, we find that the influences of various government enforcement agencies on corruption, including police, judiciary and corrections, vary. Other corruption determinants generally support the literature. Policy implications are discussed.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Rajeev Goel & Michael Nelson, 2011. "Government fragmentation versus fiscal decentralization and corruption," Public Choice, Springer, vol. 148(3), pages 471-490, September.
  • Handle: RePEc:kap:pubcho:v:148:y:2011:i:3:p:471-490
    DOI: 10.1007/s11127-010-9666-x

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    References listed on IDEAS

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    Cited by:

    1. Goel, Rajeev K. & Mazhar, Ummad & Nelson, Michael A. & Ram, Rati, 2017. "Different forms of decentralization and their impact on government performance: Micro-level evidence from 113 countries," Economic Modelling, Elsevier, vol. 62(C), pages 171-183.
    2. Nadia Fiorino & Emma Galli & Fabio Padovano, 2013. "Do fiscal decentralization and government fragmentation affect corruption in different ways? Evidence from a panel data analysis," Chapters,in: The Challenge of Local Government Size, chapter 5, pages 121-147 Edward Elgar Publishing.
    3. Yongzheng Liu & Haibo Feng, 2015. "Tax structure and corruption: cross-country evidence," Public Choice, Springer, vol. 162(1), pages 57-78, January.
    4. 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.
    5. repec:elg:eechap:17640_12 is not listed on IDEAS
    6. Choe, Chongwoo & Raschky, Paul A., 2016. "Media, institutions, and government action: Prevention vs. palliation in the time of cholera," European Journal of Political Economy, Elsevier, vol. 41(C), pages 75-93.
    7. Michael A. Nelson, 2013. "Corruption and the size of local governments: are they related?," Chapters,in: The Challenge of Local Government Size, chapter 4, pages 83-120 Edward Elgar Publishing.
    8. Rajeev K. Goel & James W. Saunoris, 2017. "Forms of government decentralization and institutional quality: evidence from a large sample of nations," Chapters,in: Central and Local Government Relations in Asia, chapter 12, pages 395-420 Edward Elgar Publishing.
    9. repec:kap:pubcho:v:172:y:2017:i:3:d:10.1007_s11127-017-0458-4 is not listed on IDEAS
    10. Kumara, Ajantha Sisira & Handapangoda, Wasana Sampath, 2014. "Political environment a ground for public sector corruption? Evidence from a cross-country analysis," MPRA Paper 54721, University Library of Munich, Germany, revised 22 Mar 2014.
    11. repec:bla:pbudge:v:36:y:2016:i:4:p:68-93 is not listed on IDEAS
    12. Rajeev K Goel & Jelena Budak & Edo Rajh, 2013. "Bureaucratic Monopoly and the Nature and Timing of Bribes: Evidence from Croatian Data," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 55(1), pages 43-58, March.
    13. Rajeev K. Goel, 2013. "Initiation of corrupt exchanges and severity of corruption," Financial Theory and Practice, Institute of Public Finance, vol. 37(2), pages 207-222.

    More about this item


    Corruption; Fiscal decentralization; Local government fragmentation; Special-purpose government; General-purpose government; H73; H11;

    JEL classification:

    • H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government


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