Illegal Drugs and Public Corruption: Crack Based Evidence from California

19 Pages Posted: 10 Sep 2018

See all articles by Alessandro Flamini

Alessandro Flamini

University of Pavia

Babak Jahanshahi

University of Edinburgh - School of Law

Kamiar Mohaddes

University of Cambridge - Judge Business School; University of Cambridge - King's College, Cambridge

Multiple version iconThere are 2 versions of this paper

Date Written: August 22, 2018

Abstract

Do illegal drugs foster public corruption? To estimate the causal effect of drugs on public corruption in California, we adopt the synthetic control method and exploit the fact that crack cocaine markets emerged asynchronously across the United States. We focus on California because crack arrived here in 1981, before reaching any other state. Our results show that public corruption more than tripled in California in the first three years following the arrival of crack cocaine. We argue that this resulted from the particular characteristics of illegal drugs: a large trade-off between profits and law enforcement, due to a cheap technology and rigid demand. Such a trade-off fosters a convergence of interests between criminals and corrupted public officials resulting in a positive causal impact of illegal drugs on corruption.

Keywords: Public Corruption, Crack Cocaine, Synthetic Control, Illegal Drugs, and Law Enforcement.

JEL Classification: C12, D73, K42

Suggested Citation

Flamini, Alessandro and Jahanshahi, Babak and Mohaddes, Kamiar, Illegal Drugs and Public Corruption: Crack Based Evidence from California (August 22, 2018). USC-INET Research Paper No. 18-10, Available at SSRN: https://ssrn.com/abstract=3241814 or http://dx.doi.org/10.2139/ssrn.3241814

Alessandro Flamini (Contact Author)

University of Pavia ( email )

Strada Nuova, 65
Pavia, 27100
Italy

Babak Jahanshahi

University of Edinburgh - School of Law ( email )

Old College
South Bridge
Edinburgh, EH8 9YL
United Kingdom

Kamiar Mohaddes

University of Cambridge - Judge Business School ( email )

Trumpington Street
Cambridge, CB2 1AG
United Kingdom
+44 (0)1223 766933 (Phone)

HOME PAGE: http://https://www.mohaddes.org/

University of Cambridge - King's College, Cambridge ( email )

King's Parade
Cambridge, CB2 1ST
United Kingdom
+44 (0)1223 766933 (Phone)

HOME PAGE: http://https://www.mohaddes.org/

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