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Corruption and the Composition of Public Spending in the United States

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  • Adriana S. Cordis

Abstract

I investigate the relation between corruption and the composition of state government spending in the United States. The analysis reveals that the United States is not immune to the adverse effects of corruption documented in cross-country studies. Corruption lowers the share of state government spending devoted to higher education and raises the share of spending devoted to other and unallocable budget items. These results are robust to the use of political variables to instrument for corruption. There is also some evidence that corruption lowers the share of spending on corrections and public welfare and raises the share of spending on health and hospitals, housing and community development, and natural resources.

Suggested Citation

  • Adriana S. Cordis, 2014. "Corruption and the Composition of Public Spending in the United States," Public Finance Review, , vol. 42(6), pages 745-773, November.
    • Handle: RePEc:sae:pubfin:v:42:y:2014:i:6:p:745-773
    DOI: 10.1177/1091142114531320
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    References listed on IDEAS

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    1. Steven D. Levitt, 2002. "Using Electoral Cycles in Police Hiring to Estimate the Effects of Police on Crime: Reply," American Economic Review, American Economic Association, vol. 92(4), pages 1244-1250, September.
    2. Harry Haupt & Walter Oberhofer, 2000. "Estimation of Constrained Singular Seemingly Unrelated Regression Models," Econometric Society World Congress 2000 Contributed Papers 0398, Econometric Society.
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    Cited by:

    1. Baraldi, Anna Laura & Ronza, Carla, 2019. "Organized crime and women in politics: Evidence from a quasi-experiment in southern Italy," MPRA Paper 98473, University Library of Munich, Germany.

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