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Political and Judicial Checks on Corruption: Evidence from American State Governments

Author

Listed:
  • James E. Alt

    (Department of Government, Harvard University)

  • David Dreyer Lassen

    (Department of Economics, University of Denmark)

Abstract

The paper investigates the effects of checks and balances on corruption. Within a presidential system, effective separation of powers is achieved under divided government, with the executive and legislative branches being controlled by different political parties. When government is unified, no effective separation exists even within a presidential system, but, we argue, can be partially restored by having an accountable judiciary. Our empirical findings show that divided government and elected, rather than appointed, state supreme court judges are associated with lower corruption and, furthermore, that the effect of an accountable judiciary is stronger under unified government, where government cannot control itself. The effect of an accountable judiciary seems to be driven primarily by judges chosen through direct elections, rather than those exposed to a retention vote following appointment.

Suggested Citation

  • 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.
  • Handle: RePEc:kud:epruwp:05-12
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    References listed on IDEAS

    as
    1. Torsten Persson & Guido Tabellini & Francesco Trebbi, 2003. "Electoral Rules and Corruption," Journal of the European Economic Association, MIT Press, vol. 1(4), pages 958-989, June.
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    4. F. Andrew Hanssen, 2004. "Is There a Politically Optimal Level of Judicial Independence?," American Economic Review, American Economic Association, vol. 94(3), pages 712-729, June.
    5. Christian Schultz, 2003. "Information, Polarization and Delegation in Democracy," EPRU Working Paper Series 03-16, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
    6. Edward L. Glaeser & Claudia Goldin, 2004. "Corruption and Reform: An Introduction," NBER Working Papers 10775, National Bureau of Economic Research, Inc.
    7. Laffont, Jean-Jacques, 2001. "Incentives and Political Economy," OUP Catalogue, Oxford University Press, number 9780199248681.
    8. Di Tella, Rafael & Fisman, Raymond, 2004. "Are Politicians Really Paid Like Bureaucrats?," Journal of Law and Economics, University of Chicago Press, vol. 47(2), pages 477-513, October.
    9. Gerring, John & Thacker, Strom C., 2004. "Political Institutions and Corruption: The Role of Unitarism and Parliamentarism," British Journal of Political Science, Cambridge University Press, vol. 34(02), pages 295-330, April.
    10. L. Randall Wray & Stephanie Bell, 2004. "Introduction," Chapters,in: Credit and State Theories of Money, chapter 1 Edward Elgar Publishing.
    11. Edward L. Glaeser & Raven Saks, 2004. "Corruption in America," NBER Working Papers 10821, National Bureau of Economic Research, Inc.
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    13. Philippe Robert-Demontrond & R. Ringoot, 2004. "Introduction," Post-Print halshs-00081823, HAL.
    14. Hanssen, F Andrew, 2000. "Independent Courts and Administrative Agencies: An Empirical Analysis of the States," Journal of Law, Economics, and Organization, Oxford University Press, vol. 16(2), pages 534-571, October.
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    Cited by:

    1. Elena Costas-Pérez & Albert Solé-Ollé & Pilar Sorribas-Navarro, 2011. "Corruption scandals, press reporting, and accountability. Evidence from Spanish mayors," Working Papers 2011/9, Institut d'Economia de Barcelona (IEB).
    2. Brown, David S. & Touchton, Michael & Whitford, Andrew, 2011. "Political Polarization as a Constraint on Corruption: A Cross-national Comparison," World Development, Elsevier, vol. 39(9), pages 1516-1529, September.
    3. Akee, Randall K. Q. & Jorgensen, Miriam & Sunde, Uwe, 2012. "Constitutions and Economic Development: Evidence from the American Indian Nations," IZA Discussion Papers 6754, Institute for the Study of Labor (IZA).
    4. Rajeev K. Goel & Michael A. Nelson, 2014. "Whistleblower laws and exposed corruption in the United States," Applied Economics, Taylor & Francis Journals, vol. 46(20), pages 2331-2341, July.
    5. Bernardo Mueller & Lee Alston & Carlos Pereira & Marcus Melo, 2008. "The Choices Governors Make: The Roles of Checks and Balances and Political Competition," Anais do XXXVI Encontro Nacional de Economia [Proceedings of the 36th Brazilian Economics Meeting] 200807181549410, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics].
    6. Smith, Jared D., 2016. "US political corruption and firm financial policies," Journal of Financial Economics, Elsevier, vol. 121(2), pages 350-367.
    7. Adriana Cordis, 2009. "Judicial checks on corruption in the United States," Economics of Governance, Springer, vol. 10(4), pages 375-401, November.
    8. 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.
    9. Noel Johnson & Courtney LaFountain & Steven Yamarik, 2011. "Corruption is bad for growth (even in the United States)," Public Choice, Springer, vol. 147(3), pages 377-393, June.
    10. 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.
    11. Costas-Pérez, Elena & Solé-Ollé, Albert & Sorribas-Navarro, Pilar, 2012. "Corruption scandals, voter information, and accountability," European Journal of Political Economy, Elsevier, vol. 28(4), pages 469-484.
    12. Rajeev Goel & Michael Nelson, 2011. "Measures of corruption and determinants of US corruption," Economics of Governance, Springer, vol. 12(2), pages 155-176, June.
    13. Akee, Randall & Jorgensen, Miriam & Sunde, Uwe, 2015. "Critical junctures and economic development – Evidence from the adoption of constitutions among American Indian Nations," Journal of Comparative Economics, Elsevier, vol. 43(4), pages 844-861.
    14. Eric Avis & Claudio Ferraz & Frederico Finan, 2016. "Do Government Audits Reduce Corruption: Estimating the Impacts of Exposing Corrupt Politicians," Working Papers id:11148, eSocialSciences.
    15. repec:bla:acctfi:v:56:y:2016:i:4:p:961-984 is not listed on IDEAS
    16. Bernardino Benito & Francisco Bastida & Ana-María Ríos & Cristina Vicente, 2014. "The causes of legal rents extraction: evidence from Spanish municipalities," Public Choice, Springer, vol. 161(3), pages 367-383, December.
    17. 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

    Keywords

    separation of powers; corruption; rent seeking; checks and balances; political institutions; judicial independence; rule of law;

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • P48 - Economic Systems - - Other Economic Systems - - - Political Economy; Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies

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