Corruption and State and Local Government Debt Expansion

Cheol Liu, Tima T. Moldogaziev, John L. Mikesell

Research output: Contribution to journalArticlepeer-review

25 Scopus citations

Abstract

Theories describing rent seeking in the public sector posit a number of negative fiscal outcomes that the choices of corrupt officials may generate. The evidence presented in this article shows that states with greater intensities of public corruption have higher aggregate levels of state and local debt. If corruption in the 10 most corrupt states were only at an average level, their public debt would be 9 percent lower, or about $249.35 per capita, all else being equal. Notably, institutional control measures may not have succeeded in restraining the expansion of state and local public debt in the presence of greater levels of corruption. State and local governments would achieve more efficient levels of fiscal discipline by curbing public sector corruption.

Original languageEnglish (US)
Pages (from-to)681-690
Number of pages10
JournalPublic Administration Review
Volume77
Issue number5
DOIs
StatePublished - Sep 1 2017

All Science Journal Classification (ASJC) codes

  • Sociology and Political Science
  • Public Administration
  • Marketing

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