Indiana Daily Student

IU, Hong Kong track state corruption

Indiana is the 16th least corrupt state, according to a new study that identifies the most corrupt and least corrupt states in the U.S.

The study comes from Researchers at IU and City University of Hong Kong.

“The Impact of Public Officials’ Corruption on the Size and Allocation of U.S. State Spending” study indicated corruption was related to excessive state spending.

Doctor Cheol Liu, lead author of the study and assistant professor at City University of Hong Kong, began the study as a brief version of his doctoral dissertation when he was studying for his Ph.D in public affairs at IU.

IU Chancellor’s Professor of Public and Environmental Affairs and one of the researchers of the study, John Mikesell, had come across corruption data and wondered if corruption impacted state spending. He then suggested Liu, his graduate assistant at the time, base his dissertation topic on corruption and state spending.

“I was curious why all governments have made various efforts to balance their budgets and scholars suggested many economic and political policy tools to solve the problem but still most governments face the same problem,” Liu said in an email. “I confront the problem in a different angle. I questioned that corruption could be a reason of the problem.”

By examining more than 25,000 convictions for federal anti-corruption law violations between 1976 and 2008, Liu and Mikesell found more corrupt states spent more money on construction and wages of public employees. They also spent less on education and public welfare, as well as spending more on law enforcement and prisons.

Liu and Mikesell found nine of the 10 observed expenditures of the most corrupt states were greater than the estimated expenditures because of the levels of corruption in those states being higher than average.

“This implies that the nine most corrupt states could have spent $1,308 less annually per capita, on average, if they had succeeded in maintaining only an average corruption level,” they wrote. “This amounts to 5.2 percent of the mean per capita expenditure, $25,210, in the states over the period 1997–2008.”

Mikesell noted Indiana’s low rating doesn’t mean Indiana it’s not immune from public corruption.

“Indiana isn’t in the list of most corrupt states, but our state needs to be vigilant, i.e., to maintain strong budget processes, strong systems of financial management, open political processes, rigid internal controls and rigorous external audits to prevent the sort of distortions associated with public corruption.”

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