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Corruption, regulation, and growth: an empirical study of the United States

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  • Noel Johnson

    ()

  • William Ruger

    ()

  • Jason Sorens

    ()

  • Steven Yamarik

    ()

Abstract

This paper investigates whether the costs of corruption are conditional on the extent of government intervention in the economy. We use data on corruption convictions and economic growth between 1975 and 2007 across the US states to test this hypothesis. Although no state approaches the level of government intervention found in many developing countries, we still find evidence for the “weak” form of the grease-the-wheels hypothesis. While corruption is never good for growth, its harmful effects are smaller in states with more regulation. Copyright Springer-Verlag Berlin Heidelberg 2014

Suggested Citation

  • Noel Johnson & William Ruger & Jason Sorens & Steven Yamarik, 2014. "Corruption, regulation, and growth: an empirical study of the United States," Economics of Governance, Springer, vol. 15(1), pages 51-69, February.
  • Handle: RePEc:spr:ecogov:v:15:y:2014:i:1:p:51-69
    DOI: 10.1007/s10101-013-0132-3
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Turhan Kaymak & Eralp Bektas, 2015. "Corruption in Emerging Markets: A Multidimensional Study," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 124(3), pages 785-805, December.
    2. Joshua C. Hall & Brad R. Humphreys & Jane E. Ruseski, 2015. "Economic Freedom, Race, and Health Disparities: Evidence from US States," Working Papers 15-43, Department of Economics, West Virginia University.
    3. Claudio Detotto & Bryan C. McCannon, 2017. "Economic freedom and public, non-market institutions: evidence from criminal prosecution," Economics of Governance, Springer, vol. 18(2), pages 107-128, May.
    4. Trabelsi, Mohamed Ali & Trabelsi, Hédi, 2014. "At what level of corruption does economic growth decrease?," MPRA Paper 81279, University Library of Munich, Germany.

    More about this item

    Keywords

    Corruption; US states; Growth; Regulation; K4; O1; H7; H0; D7;

    JEL classification:

    • K4 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations
    • H0 - Public Economics - - General
    • D7 - Microeconomics - - Analysis of Collective Decision-Making

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