Enforcement and Public Corruption: Evidence from US States

49 Pages Posted: 28 Aug 2010

See all articles by James E. Alt

James E. Alt

Harvard University - Department of Government

David Dreyer Lassen

University of Copenhagen - Department of Economics

Date Written: August 27, 2010

Abstract

We use high-quality panel data on corruption convictions, new panels of assistant U.S. attorneys and relative public sector wages, and careful attention to the consequences of modeling endogeneity to estimate the impact of prosecutorial resources on criminal convictions of those who undertake corrupt acts. Consistent with “system capacity” arguments, we find that greater prosecutor resources result in more convictions for corruption, other things equal. We find more limited, recent evidence for the deterrent effect of increased prosecutions. We control for and confirm in a panel context the effects of many previously identified correlates and causes of corruption. By explicitly determining the allocation of prosecutorial resources endogenously from past corruption convictions and political considerations, we show that this specification leads to larger estimates of the effect of resources on convictions. The results are robust to various ways of measuring the number of convictions as well as to various estimators.

Keywords: Corruption, Rent Seeking, Enforcement, Efficiency Wage, Public Sector Wages, System

JEL Classification: D72, D73, H83, K42

Suggested Citation

Alt, James E. and Lassen, David Dreyer, Enforcement and Public Corruption: Evidence from US States (August 27, 2010). University of Copenhagen Department of Economics EPRU Working Paper No. 2010-08. Available at SSRN: https://ssrn.com/abstract=1666879 or http://dx.doi.org/10.2139/ssrn.1666879

James E. Alt

Harvard University - Department of Government ( email )

1737 Cambridge Street
Cambridge, MA 02138
United States

David Dreyer Lassen (Contact Author)

University of Copenhagen - Department of Economics ( email )

Studiestraede 6
DK 1455 Copenhagen
Denmark
+45 3532 4412 (Phone)
+45 3532 4444 (Fax)

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