Public Choice

, Volume 147, Issue 3–4, pp 377–393

Corruption is bad for growth (even in the United States)

  • Noel D. Johnson
  • Courtney L. LaFountain
  • Steven Yamarik
Article

DOI: 10.1007/s11127-010-9634-5

Cite this article as:
Johnson, N.D., LaFountain, C.L. & Yamarik, S. Public Choice (2011) 147: 377. doi:10.1007/s11127-010-9634-5

Abstract

We estimate the impact of corruption on growth of output per worker in U.S. states. We improve on existing studies of the cost of corruption by using a better specified empirical model, focusing on a study population that is less likely to be affected by parameter heterogeneity, and controlling for endogeneity using political variables to instrument for corruption. We find that corruption plays a significant and causal role in lowering growth and investment across the states.

Keywords

Corruption Investment Economic growth 

Copyright information

© Springer Science+Business Media, LLC 2010

Authors and Affiliations

  • Noel D. Johnson
    • 1
  • Courtney L. LaFountain
    • 2
  • Steven Yamarik
    • 3
  1. 1.Department of Economics and Mercatus CenterGeorge Mason UniversityArlingtonUSA
  2. 2.Center for Economics, Applied Research and Methods TeamUS Government Accountability OfficeWashingtonUSA
  3. 3.Department of EconomicsCalifornia State University at Long BeachLong BeachUSA

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