Skip to main content

Corruption and government size: A disaggregated analysis

Abstract

Using annual state-level data over 1983–1987, this paper examines the effect of government size on corruption by public officials by including both demand and supply side incentives for engaging in corrupt practices. Our objectives are twofold. First, we assess the relationship between the incidence of corruption and overall measures of the size of the federal government and the state-local sector in each state. Second, we explore what kinds of government activities are more likely to be successful in deterring abuse of public office. Our results are generally supportive of Becker's “crime and punishment” model. Regarding the primary focus of the paper, our results show that government size, in particular spending by state governments, does indeed have a strong positive influence on corruption.

This is a preview of subscription content, access via your institution.

References

  • Allard, R.J. (1988). Rent-seeking with non-identical players. Public Choice 57: 3–14.

    Google Scholar 

  • Anechiarico, F. and Jacobs, J.B. (1994). Visions of corruption control and the evolution of American public administration. Public Administration Review 54: 465–473.

    Google Scholar 

  • Appelbaum, E. and Katz, E. (1987). Seeking rents by setting rents: The political economy of rent seeking. Economic Journal 97: 685–699.

    Google Scholar 

  • Basu, K., Bhattacharya, S. and Mishra, A. (1992). Notes on bribery and the control of corruption. Journal of Public Economics 48: 349–359.

    Google Scholar 

  • Beck, R., Hoskins, C. and Connolly, J.M. (1992). Rent extraction through political extortion: An empirical examination. Journal of Legal Studies XXI: 217–224.

    Google Scholar 

  • Becker, G.S. (1968). Crime and punishment: An economic approach. Journal of Political Economy 76: 169–217.

    Google Scholar 

  • Besley, T. and McLaren, J. (1993). Taxes and bribery: The role of wage incentives. Economic Journal 103: 119–141.

    Google Scholar 

  • Cadot, O. (1987). Corruption as a gamble. Journal of Public Economics 33: 223–244.

    Google Scholar 

  • Davis, M.L. (1988). Time and punishment: An intertemporal model of crime. Journal of Political Economy 96: 383–390.

    Google Scholar 

  • Feinstein, J.S. (1991). An econometric analysis of income tax evasion and its detection. Rand Journal of Economics 22: 14–35.

    Google Scholar 

  • Goel, R.K. (1991). Government size and bribery. mimeo, Illinois State University.

  • Goel, R.K. and Rich, D.P. (1989). On the economic incentives for taking bribes. Public Choice 61: 269–275.

    Google Scholar 

  • Greene, W.H. (1993). Econometric analysis. New York, NY: Macmillan Publishing Company.

    Google Scholar 

  • Huntington, S.P. (1968). Political order in changing societies. New Haven, CT: Yale University Press.

    Google Scholar 

  • Lui, F.T. (1985). An equilibrium queuing model of bribery. Journal of Political Economy 93: 760–781.

    Google Scholar 

  • Lui, F.T. (1986). A dynamic model of corruption deterrence. Journal of Public Economics 31: 215–236.

    Google Scholar 

  • McChesney, F.S. (1987). Rent extraction and rent creation in the economic theory of regulation. Journal of Legal Studies XVI: 101–118.

    Google Scholar 

  • Niskanen, W.A., Jr. (1971). Bureaucracy and representative government. Chicago, IL: Aldine-Atherton.

    Google Scholar 

  • Nitzan, S. (1994a). Modelling rent-seeking contests. European Journal of Political Economy 10: 41–60.

    Google Scholar 

  • Nitzan, S. (1994b). Transfers or public good provision? A political allocation perspective. Economics Letters 45: 451–457.

    Google Scholar 

  • Rose-Ackerman, S. (1975). The economics of corruption. Journal of Public Economics 4: 187–203.

    Google Scholar 

  • Rose-Ackerman, S. (1978). Corruption: A study in political economy. New York, NY: Academic Press.

    Google Scholar 

  • Scully, G.W. (1991). Rent-seeking in U.S. government budgets, 1900–88. Public Choice 70: 99–106.

    Google Scholar 

  • Tollison, R.D. (1982). Rent-seeking: A survey. Kyklos 35: 575–602.

    Google Scholar 

  • U.S. Department of Commerce (various years). Statistical abstract of the United States.

  • U.S. Department of Justice (1988). Report to the Congress on the activities and operations of the Public Integrity Section for 1987.

  • Welch, W.M., II. (1989). The Federal bribery statute and special interest campaign contributions. Journal of Criminal Law and Criminology 79: 1347–1373.

    Google Scholar 

Download references

Author information

Authors and Affiliations

Authors

Rights and permissions

Reprints and Permissions

About this article

Cite this article

Goel, R.K., Nelson, M.A. Corruption and government size: A disaggregated analysis. Public Choice 97, 107–120 (1998). https://doi.org/10.1023/A:1004900603583

Download citation

  • Issue Date:

  • DOI: https://doi.org/10.1023/A:1004900603583

Keywords

  • Public Finance
  • Positive Influence
  • Federal Government
  • State Government
  • Public Office