POLITICAL AND JUDICIAL CHECKS ON CORRUPTION: EVIDENCE FROM AMERICAN STATE GOVERNMENTS

Abstract

This paper investigates the effects of checks and balances on corruption. Within a presidential system, effective separation of powers is achieved under a divided government, with the executive and legislative branches being controlled by different political parties. When government is unified, no effective separation exists even within a presidential system, but, we argue, can be partially restored by having an accountable judiciary. Our empirical findings show that a divided government and elected, rather than appointed, state supreme court judges are associated with lower corruption and, furthermore, that the effect of an accountable judiciary is stronger under a unified government, where the government cannot control itself.