The Heritage Foundation is reporting on a study determining the most corrupt states in America. The study sized up the effect between 1976 and 2008 of public corruption—measured by convictions—on state spending.
It found Mississippi was at the top of the list, but guess which state was No. 9?
According to the study, the 10 most-corrupt states could have reduced per capita spending by an average of $1,308 if they had average corruption levels. The study found states in the top 10 tend to focus spending on “bribe-generating” spending and items directly beneficial to public officials such as capital projects, construction, highways, borrowing and total salaries and wages.
A climate of corruption or even a perception of one can lead to serious economic effects. The study cited several sources on how economic activity is depressed in nations riddled with corruption. States are no different, and it creates a vicious cycle.
With economic activity depressed because of corruption, states such as Mississippi are forced to use more subsidies and tax breaks. This encourages companies to engage in more rent-seeking behavior — spending wealth on political lobbying to increase one’s share of wealth without creating wealth. This helps build an even more entrenched climate of corruption with companies constantly seeking to maintain or even add to special privileges not afforded their competitors.