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

  • Campante, Filipe R.

    (Harvard University)

  • Do, Quoc-Anh

    (Singapore Management University)

We show that isolated capital cities are robustly associated with greater levels of corruption across US states. In particular, this is the case when we use the variation induced by the exogenous location of a state's centroid to instrument for the concentration of population around the capital city. We then show that different mechanisms for holding state politicians accountable are also affected by the spatial distribution of population: newspapers provide greater coverage of state politics when their audiences are more concentrated around the capital, and voter turnout in state elections is greater in places that are closer to the capital. Consistent with lower accountability, there is also evidence that there is more money in state-level political campaigns in those states with isolated capitals. We find that the role of media accountability helps explain the connection between isolated capitals and corruption. In addition, we provide some evidence that this pattern is also associated with lower levels of public good spending and outcomes.

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File URL: https://research.hks.harvard.edu/publications/workingpapers/citation.aspx?PubId=8379&type=WPN
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Paper provided by Harvard University, John F. Kennedy School of Government in its series Working Paper Series with number rwp12-016.

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Date of creation: May 2012
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Handle: RePEc:ecl:harjfk:rwp12-016
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  1. Daniel Lederman & Norman V. Loayza & Rodrigo R. Soares, 2005. "Accountability And Corruption: Political Institutions Matter," Economics and Politics, Wiley Blackwell, vol. 17, pages 1-35, 03.
  2. Albert Saiz & Uri Simonsohn, 2013. "Proxying For Unobservable Variables With Internet Document-Frequency," Journal of the European Economic Association, European Economic Association, vol. 11(1), pages 137-165, 02.
  3. James H. Stock & Motohiro Yogo, 2002. "Testing for Weak Instruments in Linear IV Regression," NBER Technical Working Papers 0284, National Bureau of Economic Research, Inc.
  4. Filipe R. Campante & Quoc-Anh Do, 2009. "A Centered Index of Spatial Concentration: Axiomatic Approach with an Application to Population and Capital Cities," Working Papers 02-2009, Singapore Management University, School of Economics.
  5. Brunetti, Aymo & Weder, Beatrice, 2003. "A free press is bad news for corruption," Journal of Public Economics, Elsevier, vol. 87(7-8), pages 1801-1824, August.
  6. Glaeser, E.L. & Ades, A.F., 1993. "Trade and Circuses: Explaining Urban Giants," Harvard Institute of Economic Research Working Papers 1646, Harvard - Institute of Economic Research.
  7. Alesina, Alberto & Baqir, Reza & Easterly, William, 1999. "Public goods and ethnic divisions," Policy Research Working Paper Series 2108, The World Bank.
  8. Matthew Gentzkow & Jesse M. Shapiro, 2010. "What Drives Media Slant? Evidence From U.S. Daily Newspapers," Econometrica, Econometric Society, vol. 78(1), pages 35-71, 01.
  9. Filipe R. Campante & Quoc-Anh Do & Bernardo V. Guimaraes, 2013. "Isolated Capital Cities and Misgovernance: Theory and Evidence," NBER Working Papers 19028, National Bureau of Economic Research, Inc.
  10. Davis, James C. & Henderson, J. Vernon, 2003. "Evidence on the political economy of the urbanization process," Journal of Urban Economics, Elsevier, vol. 53(1), pages 98-125, January.
  11. James M. Snyder, Jr. & David Strömberg, 2008. "Press Coverage and Political Accountability," NBER Working Papers 13878, National Bureau of Economic Research, Inc.
  12. 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.
  13. Matthew Gentzkow, 2006. "Television and Voter Turnout," The Quarterly Journal of Economics, MIT Press, vol. 121(3), pages 931-972, 08.
  14. James E. Alt & David Dreyer Lassen, 2002. "The Political Economy of Institutions and Corruption in American States," EPRU Working Paper Series 02-16, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
  15. Ritva Reinikka & Jakob Svensson, 2005. "Fighting Corruption to Improve Schooling: Evidence from a Newspaper Campaign in Uganda," Journal of the European Economic Association, MIT Press, vol. 3(2-3), pages 259-267, 04/05.
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