Rose Jacobs | Mar 03, 2021
Government corruption is hard to see, and the drag it imposes on economic development is hard to measure. But Chicago Booth’s Hans B. Christensen, Mark G. Maffett, and Thomas Rauter found a way to gauge the effects of a crackdown on corruption and to actually see them observing how many lights are on after sundown as a metric for economic activity.
This methodology helped them determine that a four decades-old American anti-corruption statute was associated with a 14 percent increase in economic activity near mines and oil wells in Africa. The findings suggest that measures to reduce public bribery, extortion, and embezzlement can help reverse the “political resource curse,” the phenomenon where rich endowments of natural resources can warp behavior in countries with weak political institutions.