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Summer 2023

ISSN 0890-913X

Volume 38, Number 2

The Interaction Effect of Economic Freedom and Economic Development on Corruption in US States

Zachary D. Blizard, Center for the Study of Economic Mobility at Winston-Salem State University

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TheJournalofPrivateEnterprise38(2),2023,17-37TheInteractionEffectofEconomicFreedomandEconomicDevelopmentonCorruptioninUSStatesZacharyD.BlizardCenterfortheStudyofEconomicMobilityatWinston-SalemStateUniversityUnitedStatesofAmericaAbstractTheempiricalrelationshipbetweencorruptionandeconomicfreedomatthecountryleveliscomplex,withtherelationshipvaryingdependingonwhetheracountryisrichorpoor.IfindasimilarrelationshipamongstateswithintheUS.Iestimateafixed-effectsPoissonregressionmodelofstate-levelcorruption-convictionratesandfindasignificantandnegativeinteractioneffectofeconomicfreedomandeconomicdevelopmentoncorruption.Forstateswithlowlevelsofeconomicdevelopment,economicfreedomincreasescorruption,whiletheoppositeistrueforstateswithhighlevelsofeconomicdevelopment.JELCodes:H10,H11,H50,K20,O5Keywords:economicfreedom,USstates,corruption,economicdevelopmentI.IntroductionGovernmentinterventionsintheeconomyhavebeenwidelystudiedintheeconomicsliterature,withtheoutcomesoftheseinterventionsbeingwelldocumented.Onesuchoutcomeiscorruption.Standardeconomicmodelspredictthatincreasedgovernmentinterventioncanleadtomorecorruption.Manystudieshaveempiricallyexaminedthisrelationshipandhavegenerallyfoundsupportiveevidence.However,therearesomeconflictingfindingsthatsuggesttherelationshipmaydependonotherfactors.Forexample,studieshavefoundthateconomicfreedommayincreasecorruptioninpoorcountries,ratherthandecreasingit.Hence,acountry’slevelofeconomicdevelopmentcanchangethewayeconomicfreedomaffectscorruption.ThisfindinghasyettomotivateasimilarstudyoftherelationshipbetweeneconomicfreedomandcorruptionacrossUSstates.ThoughthepooreststatesintheUSaresubstantiallybetteroffthanthepoorestcountry,thereisstillwide

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Title	The Interaction Effect of Economic Freedom and Economic Development on Corruption in US States
Authors/Creators:	Zachary D. Blizard, Center for the Study of Economic Mobility at Winston-Salem State University
Year:	2023
Volume:	38
Number:	2
Pages:	17 - 37
Publisher:	The Association of Private Enterprise Education
ISSN:	0890-913X
Document Type:	Articles
Keywords:	economic freedom, US states, corruption, economic development

Citation:
Blizard, Zachary D. / 2023. "The Interaction Effect of Economic Freedom and Economic Development on Corruption in US States." The Journal of Private Enterprise, 38(2): 17-37.