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

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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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