Download This PaperCorruption, Decentralization and Yardstick Competition
22 Pages Posted: 22 Jan 2006
Date Written: June 2006
Abstract
Several empirical studies have found a negative relationship between corruption and the decentralization of the powers to tax and spend. In this paper we explain this phenomenon using a model of Yardstick Competition. Using data on federal corruption-related convictions in U.S. states we propose and test a spatial autoregressive model of corruption, providing new evidence in support of the theoretical findings.
Keywords: Corruption, decentralization, yardstick competition, spatial autoregression
JEL Classification: H20, H29
Suggested Citation: Suggested Citation
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