Contents

Corruption and State and Local Government Debt Expansion

Liu, Cheol / Moldogaziev, Tima T. / Mikesell, John L.

Abstract

Theories describing rent seeking in the public sector posit a number of negative fiscal outcomes that the choices of corrupt officials may generate. The evidence presented in this article shows that states with greater intensities of public corruption have higher aggregate levels of state and local debt. If corruption in the 10 most corrupt states were only at an average level, their public debt would be 9 percent lower, or about $249.35 per capita, all else being equal. Notably, institutional control measures may not have succeeded in restraining the expansion of state and local public debt in the presence of greater levels of corruption. State and local governments would achieve more efficient levels of fiscal discipline by curbing public sector corruption.

Issue Date
2017-09
Publisher
WILEY
Keywords Plus
EMPIRICAL-EVIDENCE; AMERICAN STATES; DEFICITS; POLICY
Citation
PUBLIC ADMINISTRATION REVIEW, v.77, no.5, pp.681 - 690, 2017
DOI
10.1111/puar.12711
Journal Title
PUBLIC ADMINISTRATION REVIEW
Start Page
681
End Page
690
ISSN
0033-3352
Language
English
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