Do You Pay a Corruption Tax?

Posted on July 15, 2014 by

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According to a new study by Cheol Liu of the City University of Hong Kong and John Mikesell of Inidana University, states that have more corruption spend more money and in less effective ways. I have not yet read the journal article behind this story, but the Huffington Post provides an interesting snippet here.

Most interestingly, the study claims that corrupt states spend more money in areas that are more prone to corruption–highways, capital projects, and construction in general–and less money on education and health care when compared to less corrupt states.

This makes so much sense, but I would be careful about drawing the wrong conclusions. I would like to see more data and a discussion of the possible causality problems.

In case you are interested, the most corrupt states, according to their measures, are:

Mississippi, Louisiana, Tennessee, Illinois, Pennsylvania, Alabama, Alaska, South Dakota, Kentucky, and Florida.

While the study may be solid, I would challenge any measure of corruption where neither Louisiana nor Illinois are number 1!

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