Public Corruption and Government Management Capacity

Abstract

This article demonstrates, theoretically and empirically, that public corruption is likely to degrade government management capacity and its sub-dimensions such as human resource management, information management, financial management, and capital (infrastructure) management. By shedding light on the classic black box idea of management, we explain that public corruption deteriorates government management capacity by hampering an effective integration of the sub-dimensions of management. Using panel ordered logit regressions and the generalized method of moments estimations, we find a statistically significant negative association between public corruption and the overall management capacity of the U.S. state governments. Across the sub-dimensions of government management capacity, the harmful impact of corruption is most evident in capital and infrastructure management, even in the context of the U.S. state governments. This requires policymakers’ special attention to capital and infrastructure management practices, even in the most advanced country of the management system.