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

Public Choice volume 147, pages 377–393 (2011)Cite this article

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.

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Authors and Affiliations

  1. Department of Economics and Mercatus Center, George Mason University, 3301 North Fairfax Drive, Suite 450, Arlington, VA, 22201, USA

    Noel D. Johnson

  2. Center for Economics, Applied Research and Methods Team, US Government Accountability Office, 441 G St NW, Washington, DC, 20548, USA

    Courtney L. LaFountain

  3. Department of Economics, California State University at Long Beach, Long Beach, CA, 90840, USA

    Steven Yamarik

Authors
  1. Noel D. Johnson
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  2. Courtney L. LaFountain
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  3. Steven Yamarik
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Correspondence to Noel D. Johnson.

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Johnson, N.D., LaFountain, C.L. & Yamarik, S. Corruption is bad for growth (even in the United States). Public Choice 147, 377–393 (2011). https://doi.org/10.1007/s11127-010-9634-5

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  • DOI: https://doi.org/10.1007/s11127-010-9634-5

Keywords

  • Corruption
  • Investment
  • Economic growth