Corruption is Bad for Growth (Even in the United States)

This paper estimates the impact of corruption on growth of output per worker in U.S. states.  It improves on existing studies of the cost of corruption by using a better specified empirical model, focusing on a study population that is less likely to be affected by parameter heterogeneity, and controlling for endogeneity using political variables to instrument for corruption. The authors find that corruption plays a significant and causal role in lowering growth and investment across the States.

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Citation (Chicago Style)

Johnson, Noel D., Courtney L. LaFountain, and Steven Yamarik. Corruption is Bad for Growth  (Even in the United States)." Working Paper, Mercatus Center at George Mason University, 2009.