Lessons from the “Isolated Capital” Effect for the Fight Against Public Corruption

As numerous commentators have written on this blog and elsewhere, the New York state legislature suffers from a serious corruption problem (see, for example, here and here), with six corruption convictions of government leaders in eleven years, and suspicions that the rot runs much deeper. Would things be any better if New York’s capital were in New York City rather than in Albany? While it’s impossible to say for sure, research suggests—perhaps surprisingly—that the answer might be yes. In an influential paper, Filipe Campante and Qhoc-Anh Do found that, on average, corruption (as measured by federal corruption-related crime convictions per capita) is higher in states where the state capital is more “isolated”—that is, farther from the state’s major population centers. (States with relatively isolated capitals include not just New York (Albany), but also Illinois (Springfield), South Carolina (Columbia), Nevada (Carson City), and Florida (Tallahassee), among others.)

Of course, states are very unlikely to relocate their capitals, but understanding the likely mechanisms that explain Campante and Do’s surprising finding may help us better understand the sorts of policy levers that might help reduce corruption in state government. So why might it be the case that states with more isolated capital cities might have more corruption?

Campante and Do argue that the proximity of the state capital to the state’s major population center serves as a proxy for accountability: When there are fewer residents, businesses, media, and non-profits in the capital city, less attention is paid to scrutinizing the actions of individuals in government. In contrast, when the capital is located in a densely populated area where lots of people live, more eyes will be watching the state government.

Understanding the Campante and Do finding in this way suggests a few factors—factor which, unlike the capital’s location, may be susceptible to influence—that might help fight state-level corruption:

  • Media Presence: An independent press is considered a vital tool to uncover misconduct on the part of public officials. Every major news outlet in the United States is based in a major urban area, with more such outlets based in larger cities. By way of illustration, consider the fact that Albany has three local news channels, while New York City has thirteen. Albany has two circulated local newspapers, while New York City has more than can be counted, with such venerable institutions as the New York Times, New York Post, New York Daily News, The Sun, and Newsday. Some of this difference in media concentration is an inevitable consequence of geography and population, as Campante and Do’s analysis suggests. But media concentration is also a consequence of policy decisions. Consider, for example, the Federal Communications Commission’s recent change, this past August, to its so-called Main Studio Rule. Under the original version of the rule, a radio station’s main studio has to be located within a major business center of the community; the idea was that local stations should provide oversight and information on topics of local interest. Under the revised version of the rule, this requirement has been relaxed—with the likely consequence, as Professor Christopher Ali observes, that less populated areas will become even more underserved by media outlets. While no state capital is “rural” in the technical sense, revision of the Main Studio Rule will negatively impact media coverage in small cities, including more isolated state capitals. Another threat to robust press coverage is media consolidation, which may reduce the number of news outlets covering state government, regardless of where the state capital is located.
  • Access to Information about Public Expenditure: We know that information about expenditure is critical for government accountability and for combating corruption in public procurement. (See, for example, Transparency International’s helpful guide on this topic.) Where people live further from state capitals, Campante and Do suggest that they are less involved with public policy, meaning that public expenditure information will not have any effect on corruption because, even holding constant the amount of public information that governments provide, fewer people are monitoring this information. But even putting that consideration aside, the amount of information that state governments provide about public expenditures is not constant across states. New York has a comptroller in place to audit state expenditures for corruption, which audits 25 million payments totaling about $80 billion each year. However, it is not clear from the State’s website how the results of each audit are available. In contrast, legislation in Colorado mandates transparent disclosure of information related to public-private partnerships, and offers town hall meetings during each phase of a transportation project by which public and private stakeholders may receive information and comment. In addition, upon the request of the Colorado General Assembly, the state Department of Transportation must provide additional reports and information for the purpose of instituting a safeguard of transparency on the procurement process.
  • Voter Turnout. Voting officials out of office is perhaps the most effective way citizens for citizens to hold their leaders accountable for corruption. Campante and Do argue that voter turnout in state elections is higher in counties close to state capitals. This may also explain their main result: In states where the area around the state capital is more densely populated, more people tend to vote in state elections, meaning that the disciplining effect of electoral accountability is likely stronger. New York State again provides a useful illustration: As of April 1, 2017, Albany County has just under 200,000 voters, while New York City’s counties (Manhattan, the Bronx, Kings, Queens, and Richmond) have almost five million voters. And New York’s statewide voter turnout is among the worst in the nation (see here and here). Again, while it’s not realistic to imagine that New York or any other state will move its capital any time soon, this finding drives home the importance of other policies that can influence voter turnout. For example, in addition to the fact that Albany is a relatively isolated capital, part of the explanation for New York’s low turnout may be the fact that New York uses a “closed primary” system, meaning that voters must register by party and cannot change their affiliation too close to the date of an election. (New York also has the earliest deadline for party registration.) New York also does not have early voting. In contrast, in 2014 Colorado moved to a mail ballot and reported the highest turnout in the nation, substantially higher than their previous 2010 cycle.

At first glance, Campante and Do’s finding about isolated capital cities may seem like one of those academic results that’s kind of neat and surprising, but irrelevant for policy. But in fact, once we understand the likely explanations for their finding, we recognize that the study is in fact providing important evidence on the factors that may explain state-level corruption, which do indeed provide insights that are relevant to public policy reforms. Public accountability only works where citizens can scrutinize their government, which requires access to information, either from the press about government actions or from the government itself, and using that information to vote. And while capitals are hard to move, media density, public expenditure transparency, and voter turnout are factors that are susceptible to influence through other mechanisms. Even small steps, like New York’s Comptroller and changes to voting laws, move the fight against state-level corruption forward.

3 thoughts on “Lessons from the “Isolated Capital” Effect for the Fight Against Public Corruption

  1. Pingback: Lessons from the “Isolated Capital” Effect for the Fight Against Public Corruption | Matthews' Blog

    • Abhinav – That is a great point. I agree that these lessons are most applicable to grand corruption and that was my process in thinking through the post. However, I wonder which, if any, of these would work for petty corruption (likely not many) and what (if anything) can we learn about location of state capitals on petty corruption. My impression is that this would be a difficult hypothesis to test, given that petty corruption seems more difficult to track in aggregate, but it is an interesting idea to contemplate.

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