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<P>Corruption in America
EDWARD L. GLAESER
Harvard University - Department of Economics; The Brookings Institution; National Bureau of Economic Research (NBER)
RAVEN E. SAKS
Harvard University - Department of Economics</P>
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<P>October 2004 </P>
<P>Harvard Institute of Economic Research Discussion Paper No. 2043
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Abstract:
We use a data set of federal corruption convictions in the U.S. to investigate the causes and consequences of corruption. More educated states, and to a less degree richer states, have less corruption. This relationship holds even when we use historical factors like education in 1928 or Congregationalism in 1890, as instruments for the level of schooling today. The level of corruption is weakly correlated with the level of income inequality and racial fractionalization, and uncorrelated with the size of government. There is a weak negative relationship between corruption and employment and income growth. These results echo the cross-country findings, and support the view that the correlation between development and good political outcomes occurs because more education improves political institutions.
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