Isolated Capital Cities, Accountability and Corruption: Evidence from US States
We show that isolated capital cities are robustly associated with greater levels of corruption across US states, in line with the view that this isolation reduces accountability, and in contrast with the alternative hypothesis that it might forestall political capture. We then provide direct evidence that the spatial distribution of population relative to the capital affects different accountability mechanisms over state politics: newspaper coverage, voter knowledge and information, and turnout. We also find evidence against the capture hypothesis: isolated capitals are associated with more money in state-level campaigns. Finally, we show that isolation is linked with worse public good provision.
We thank Alberto Alesina, Jim Alt, Dave Bakke, Francesco Caselli, Davin Chor, Thomas Cole, Alan Ehrenhalt, Claudio Ferraz, Jeff Frieden, Ed Glaeser, Josh Goodman, Rema Hanna, David Lauter, David Luberoff, Andrei Shleifer, Rodrigo Soares, Enrico Spolaore, Ernesto Stein, David Yanagizawa-Drott, and Katia Zhuravskaya for many helpful conversations, seminar participants at PUC-Rio, EPGE-FGV, FGV-SP, LIEPP-Sciences Po, the Political Economy Group at LACEA, and the Taubman Center for State and Local Government at Harvard for useful suggestions, Ed Glaeser, Nguyen Phu Binh, Raven Saks, Kristina Tobio, and C. Scott Walker for invaluable help with the data collection, and Siaw Kiat Hau for excellent research assistance. We gratefully acknowledge the Taubman Center for State and Local Government for generous financial support, and the Economics Department at PUC-Rio for its outstanding hospitality throughout much of the period of work on this research (Campante), and the Singapore Management University and its Lee Foundation Research Award for generous support over most of the work on this research (Do). All errors are our own. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
Filipe R. Campante & Quoc-Anh Do, 2014. "Isolated Capital Cities, Accountability, and Corruption: Evidence from US States," American Economic Review, American Economic Association, American Economic Association, vol. 104(8), pages 2456-81, August. citation courtesy of