Isolated Capital Cities, Accountability and Corruption: Evidence from US States

Abstract

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.

Asia’s little divergence: state capacity in China and Japan before 1850

“…on plant-level productivity and profits. Campante and Do (2014) provide strong evidence that isolated capital cities in US states are associated with lower accountability, greater levels of corruption, and worse public goods provision. These studies show that distance and size are a challenge to good governance not only in premodern regimes in Asia and Europe, but also in modern states and corporations.…”

Locating the government: Capital cities and civil conflict

“…This, in turn, will lead to a lower likelihood of civil conflict. While this makes intuitive sense, recent work by Campante et al (2013) and Campante (2014) has argued that isolated capitals lead to unaccountable governments and misgovernance through a very similar mechanism as the one proposed in this paper. Campante et al (2013) model the relationship between capital cities and governance based on the assumption that incumbent elites are constrained by the threat of insurrection and that when the threat of insurrection comes from groups located further from the capital the threat is smaller.…”

“…They argue and find evidence that isolated capitals are associated with misgovernance in the case of nondemocracies because the government is less constrained. Campante (2014) finds that isolated state capitals in the US are associated with higher levels of corruption, and find evidence that this relationship is driven by voters paying less attention to state politics when they live further from the state capital. Thus, isolated state capitals are allowed to operate with less accountability from the public than less isolated state capitals.…”

“…Empirically, Buhaug and Gates (2002) find evidence that civil conflicts are more likely to occur at greater distances from the capital. The argument here is that while locating the capital in the largest urban area of the country may increase government accountability to this large urban population, and therefore increase overall accountability (as suggested in Campante et al (2013) and Campante (2014)), it may also reduce responsiveness to other geographic areas and therefore increase the probability of civil conflict.…”

Natural resources, decentralization, and risk sharing: Can resource booms unify nations?

“…As can be seen, the main coe¢ cient of interest remains negative and signi…cant, thus implying the mechanism at work is di¤erent. 19 A second option is that the changes in FD are an outcome of violent political acts. The connection between resource booms and violent con ‡icts has been discussed extensively in the literature; 20 hence, resource booms may a¤ect FD through that channel.…”