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Corruption and State and Local Government Debt Expansion
Author(s) -
Liu Cheol,
Moldogaziev Tima T.,
Mikesell John L.
Publication year - 2017
Publication title -
public administration review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.721
H-Index - 139
eISSN - 1540-6210
pISSN - 0033-3352
DOI - 10.1111/puar.12711
Subject(s) - debt , language change , local government , state (computer science) , public sector , per capita , economics , public finance , monetary economics , government (linguistics) , financial system , economic policy , macroeconomics , political science , economy , public administration , art , population , demography , literature , algorithm , sociology , computer science , linguistics , philosophy
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 .