Does Corruption Lead to Lower Subnational Credit Ratings? Fiscal Dependence, Market Reputation, and the Cost of Debt

IF 1.4 3区社会学 Q2 INTERNATIONAL RELATIONS

Business and Politics Pub Date : 2021-03-02 DOI:10.1017/bap.2020.22

Maciej Sychowiec, Monika Bauhr, N. Charron

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Abstract

Abstract While studies show a consistent negative relationship between the level of corruption and range indicators of national-level economic performance, including sovereign credit ratings, we know less about the relationship between corruption and subnational credit ratings. This study suggests that federal transfers allow states with higher levels of corruption to retain good credit ratings, despite the negative economic implications of corruption more broadly, which also allows them to continue to borrow at low costs. Using data on corruption conviction in US states and credit ratings between 2001 and 2015, we show that corruption does not directly reduce credit ratings on average. We find, however, heterogeneous effects, in that there is a negative effect of corruption on credit ratings only in states that have a comparatively low level of fiscal dependence on federal transfers. This suggest that while less dependent states are punished by international assessors when seen as more corrupt, corruption does not affect the ratings of states with higher levels of fiscal dependence on federal revenue.

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腐败会导致地方信用评级下降吗?财政依赖、市场声誉和债务成本

虽然研究表明腐败程度与国家层面经济表现的范围指标(包括主权信用评级)之间存在一致的负相关关系，但我们对腐败与地方信用评级之间的关系知之甚少。这项研究表明，尽管腐败会对经济产生更广泛的负面影响，但联邦转移支付使腐败程度较高的州保持了良好的信用评级，这也使它们能够继续以低成本借款。利用2001年至2015年间美国各州的腐败定罪数据和信用评级数据，我们发现，平均而言，腐败不会直接降低信用评级。然而，我们发现了异质性效应，因为腐败对信用评级的负面影响仅在财政对联邦转移的依赖程度相对较低的州。这表明，虽然依赖程度较低的州在被视为更腐败时受到国际评估机构的惩罚，但腐败并不影响对联邦收入财政依赖程度较高的州的评级。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Business and Politics Social Sciences-Political Science and International Relations

CiteScore

3.60

自引率

16.70%

发文量

期刊介绍： Business and Politics solicits articles within the broad area of the interaction between firms and political actors. Two specific areas are of particular interest to the journal. The first concerns the use of non-market corporate strategy. These efforts include internal organizational design decisions as well as external strategies. Internal organizational design refers to management structure, sourcing decisions, and transnational organization with respect to the firm"s non-market environment. External strategies include legal tactics, testimony, lobbying and other means to influence policy makers at all levels of government and international institutions as an adjunct to market strategies of the firm.