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

  • Filipe R. Campante


    (Harvard Kennedy School, Harvard University)

  • Quoc-Anh Do


    (School of Economics, 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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Paper provided by Singapore Management University, School of Economics in its series Working Papers with number 21-2012.

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Length: 58 pages
Date of creation: May 2012
Date of revision:
Publication status: Published in SMU Economics and Statistics Working Paper Series
Handle: RePEc:siu:wpaper:21-2012
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References listed on IDEAS
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  1. James M. Snyder, Jr. & David Strömberg, 2008. "Press Coverage and Political Accountability," NBER Working Papers 13878, National Bureau of Economic Research, Inc.
  2. Matthew Gentzkow & Edward L. Glaeser & Claudia Goldin, 2004. "The Rise of the Fourth Estate: How Newspapers Became Informative and Why It Mattered," NBER Working Papers 10791, National Bureau of Economic Research, Inc.
  3. Guimarães, Bernardo de Vasconcellos & Campante, Filipe Robin & Do, Quoc-Anh, 2013. "Isolated capital cities and misgovernance: theory and evidence," Textos para discussão 323, Escola de Economia de São Paulo, Getulio Vargas Foundation (Brazil).
  4. 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.
  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. Alberto F. Ades & Edward L. Glaeser, 1995. "Trade and Circuses: Explaining Urban Giants," The Quarterly Journal of Economics, Oxford University Press, vol. 110(1), pages 195-227.
  7. 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.
  8. Lederman, Daniel & Loayza, Norman & Reis Soares, Rodrigo, 2001. "Accountability and corruption : political institutions matter," Policy Research Working Paper Series 2708, The World Bank.
  9. 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.
  10. Filipe R. Campante & Quoc-Anh Do, 2009. "A Centered Index of Spatial Concentration : Axiomatic Approach with an Application to Population and Capital Cities," Development Economics Working Papers 22059, East Asian Bureau of Economic Research.
  11. Alberto Alesina & Reza Baqir & William Easterly, 1999. "Public Goods and Ethnic Divisions," The Quarterly Journal of Economics, Oxford University Press, vol. 114(4), pages 1243-1284.
  12. Matthew Gentzkow, 2006. "Television and Voter Turnout," The Quarterly Journal of Economics, Oxford University Press, vol. 121(3), pages 931-972.
  13. Matthew Gentzkow & Jesse M. Shapiro, 2006. "What Drives Media Slant? Evidence from U.S. Daily Newspapers," NBER Working Papers 12707, National Bureau of Economic Research, Inc.
  14. Alberto Alesina & Reza Baqir & William Easterly, 1997. "Public Goods and Ethnic Divisions," NBER Working Papers 6009, National Bureau of Economic Research, Inc.
  15. 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.
  16. repec:cup:cbooks:9780521659123 is not listed on IDEAS
  17. 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.
  18. repec:cup:cbooks:9780521632935 is not listed on IDEAS
  19. 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.
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