The Costs of Corruption

According to an article this week in Governing magazine, a report in Public Administration Review found that "more corrupt states tended to spend money on construction, highways, and police protection programs, which provide more opportunity for corrupt officials to use public money for their own gain. These states spend less on health, education, and welfare, which provide less opportunity for officials to collect bribes, according to Indiana University's John Mikesell, who co-authored the report with Cheol Liu of the University of Hong Kong." The report is entitled "The Impact of Public Officials’ Corruption on the Size and Allocation of U.S. State Spending."

The article looks at other costs of corruption, including of institutional corruption, where no one is convicted of a crime or found to have violated an ethics provision. These costs include the higher costs to government when honest developers and contractors choose not to bid on projects and contracts because they believe "the winning bidder has already bought political favor." There are also the unmeasurable costs that accompany a loss of public trust in those who govern their communities.

The problem with the study on which this report was based is that, like other such reports, it looks at corruption primarily in terms of convictions of state officials. As a commenter notes, "By only considering convictions, the places where corruption is tolerated look good." The F.B.I. can still do sting operations in those states, but convictions will be lower than otherwise.

More important, such studies support the idea that criminal enforcement is the best way to prevent government corruption, without considering the far less expensive prevention mechanisms of government ethics programs, including training, advice, and disclosure.

Robert Wechsler
Director of Research-Retired, City Ethics

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