Public Corruption and Government Management Capacity

Abstract

This article demonstrates, theoretically and empirically, that public corruption is likely to degrade government management capacity and its sub-dimensions such as human resource management, information management, financial management, and capital (infrastructure) management. By shedding light on the classic black box idea of management, we explain that public corruption deteriorates government management capacity by hampering an effective integration of the sub-dimensions of management. Using panel ordered logit regressions and the generalized method of moments estimations, we find a statistically significant negative association between public corruption and the overall management capacity of the U.S. state governments. Across the sub-dimensions of government management capacity, the harmful impact of corruption is most evident in capital and infrastructure management, even in the context of the U.S. state governments. This requires policymakers’ special attention to capital and infrastructure management practices, even in the most advanced country of the management system.

Keywords:

• capital (infrastructure) management
• government management capacity
• public corruption

Notes

1 The odds ratios of all the other variables are available upon request.

2 The regression results for predicted probabilities and marginal effects are not reported here for brevity. They are available upon requests.

3 The coefficient is significant at a 1% significance level in Model IV.

4 The coefficient is significant at a 5% significance level in Model I.

5 The coefficient is insignificant in Model I.

Additional information

Notes on contributors

Jekyung Lee

Jekyung Lee is an Assistant Professor at the Hainan University-Arizona State University Joint International Tourism College (HAIT C), Hainan University, China. His current research focuses on financial management policy and performance budgeting. He is an Affiliated Research Fellow of the Institute of State Governance Studies at Yonsei University, Seoul, Korea.

Cheol Liu

Cheol Liu is an Associate Professor at KDI School of Public Policy and Management. His research agenda is to diagnose various risks in the government's fiscal health, including corruption, and identify implementable proposals for reform. Currently, he is the head of the Experiment Lab for Public Management Research (ExPMR).