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Corruption, Decentralization and Yardstick Competition

  • Christopher J. Ellis

    ()

    (University of Oregon)

  • Oguzhan C. Dincer

    (Massey University)

  • Glenn R. Waddell

    (University of Oregon)

Several empirical studies have found a negative relationship between corruption and the decentralization of the powers to tax and spend. In this paper we explain this phenomenon using a model of Yardstick Competition. Using data on federal corruption-related convictions in U.S. states we propose and test a spatial autoregressive model of corruption, providing new evidence in support of the theoretical findings.

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Paper provided by University of Oregon Economics Department in its series University of Oregon Economics Department Working Papers with number 2005-5.

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Length: 21
Date of creation: 01 Mar 2005
Date of revision: 01 Jan 2006
Handle: RePEc:ore:uoecwp:2005-5
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Web page: http://economics.uoregon.edu/
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  1. Glaeser, Edward L. & Saks, Raven E., 2006. "Corruption in America," Journal of Public Economics, Elsevier, vol. 90(6-7), pages 1053-1072, August.
  2. Fisman, Raymond & Gatti, Roberta, 2000. "Decentralization and corruption - evidence across countries," Policy Research Working Paper Series 2290, The World Bank.
  3. Joshua D. Angrist & Guido W. Imbens, 1995. "Identification and Estimation of Local Average Treatment Effects," NBER Technical Working Papers 0118, National Bureau of Economic Research, Inc.
  4. Timothy Besley & Michael Smart, 2005. "Fiscal Restraints and Voter Welfare," STICERD - Political Economy and Public Policy Paper Series 06, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
  5. Lazear, Edward P & Rosen, Sherwin, 1981. "Rank-Order Tournaments as Optimum Labor Contracts," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 841-64, October.
  6. Fredriksson, Per G. & List, John A. & Millimet, Daniel L., 2003. "Bureaucratic corruption, environmental policy and inbound US FDI: theory and evidence," Journal of Public Economics, Elsevier, vol. 87(7-8), pages 1407-1430, August.
  7. Maarten Allers & J. Elhorst, 2005. "Tax Mimicking and Yardstick Competition Among Local Governments in the Netherlands," International Tax and Public Finance, Springer, vol. 12(4), pages 493-513, August.
  8. Salmon, Pierre, 1987. "Decentralisation as an Incentive Scheme," Oxford Review of Economic Policy, Oxford University Press, vol. 3(2), pages 24-43, Summer.
  9. Dincer, Oguzhan C., 2008. "Ethnic and religious diversity and corruption," Economics Letters, Elsevier, vol. 99(1), pages 98-102, April.
  10. Fisman, Raymond & Gatti, Roberta, 2002. " Decentralization and Corruption: Evidence from U.S. Federal Transfer Programs," Public Choice, Springer, vol. 113(1-2), pages 25-35, October.
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