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Corruption in America

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  • Edward L. Glaeser
  • Raven Saks

Abstract

We use a data set of federal corruption convictions in the U.S. to investigate the causes and consequences of corruption. More educated states, and to a less degree richer states, have less corruption. This relationship holds even when we use historical factors like education in 1928 or Congregationalism in 1890, as instruments for the level of schooling today. The level of corruption is weakly correlated with the level of income inequality and racial fractionalization, and uncorrelated with the size of government. There is a weak negative relationship between corruption and employment and income growth. These results echo the cross-country findings, and support the view that the correlation between development and good political outcomes occurs because more education improves political institutions.

Suggested Citation

  • Edward L. Glaeser & Raven Saks, 2004. "Corruption in America," NBER Working Papers 10821, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:10821
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    References listed on IDEAS

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    Cited by:

    1. Felix, R. Alison & Hines, James R., 2013. "Who offers tax-based business development incentives?," Journal of Urban Economics, Elsevier, vol. 75(C), pages 80-91.
    2. Edward L. Glaeser & Claudia Goldin, 2006. "Corruption and Reform: Introduction," NBER Chapters,in: Corruption and Reform: Lessons from America's Economic History, pages 2-22 National Bureau of Economic Research, Inc.
    3. Olken, Benjamin A., 2006. "Corruption and the costs of redistribution: Micro evidence from Indonesia," Journal of Public Economics, Elsevier, vol. 90(4-5), pages 853-870, May.
    4. Olken, Benjamin A., 2009. "Corruption perceptions vs. corruption reality," Journal of Public Economics, Elsevier, vol. 93(7-8), pages 950-964, August.
    5. Thum, Marcel, 2004. "Korruption," Dresden Discussion Paper Series in Economics 11/04, Technische Universität Dresden, Faculty of Business and Economics, Department of Economics.
    6. Kodila Tedika, Oasis, 2012. "Empirical Survey on the Causes of the Corruption
      [Aperçu empirique sur les causes de la corruption]
      ," MPRA Paper 41484, University Library of Munich, Germany.
    7. Athanasouli, Daphne & Goujard, Antoine, 2015. "Corruption and management practices: Firm level evidence," Journal of Comparative Economics, Elsevier, vol. 43(4), pages 1014-1034.
    8. Marcel Thum, 2005. "Korruption und Schattenwirtschaft," ifo Working Paper Series _no.12, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    9. Dincer, Oguzhan C., 2008. "Ethnic and religious diversity and corruption," Economics Letters, Elsevier, vol. 99(1), pages 98-102, April.
    10. Russell Sobel & Nabamita Dutta & Sanjukta Roy, 2010. "Does cultural diversity increase the rate of entrepreneurship?," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 23(3), pages 269-286, September.
    11. Oguzhan C. Dincer & Peter J. Lambert, 2006. "Taking care of your own: Ethnic and religious heterogeneity and income inequality," Working Papers 48, ECINEQ, Society for the Study of Economic Inequality.
    12. N. Deyshappriya, 2015. "Do corruption and peace affect economic growth? Evidences from the cross-country analysis," Journal of Social and Economic Development, Springer;Institute for Social and Economic Change, vol. 17(2), pages 135-147, October.
    13. James E. Alt & David D. Lassen, 2008. "Political And Judicial Checks On Corruption: Evidence From American State Governments," Economics and Politics, Wiley Blackwell, vol. 20(1), pages 33-61, March.

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    JEL classification:

    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations

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