Corruption, particularly political or “grand” corruption, distorts the entire decision-making process connected with public investment projects. The degree of distortions is higher with weaker auditing institutions. The evidence presented shows that higher corruption is associated with (i)...

The common-pool problem is a central issue in the relationship between the political structure of jurisdictions and the size of public spending. Models predict that, other things being equal, greater political districting of a jurisdiction raises the scale of government. This paper presents new...