Oil, politics, and Corrupt Bastards

Does oil corrupt? We test this theory using forty years of U.S. state-level data measuring corruption as both convictions of corruption and the frequency that words like corrupt'', fraud'', and bribe''-and their iterations-appear in newspapers. We find that oil-rich U.S. states experience more corruption than their oil-poor counterparts, but only during periods of high oil prices, suggesting a causal relationship. Results are robust to a variety of modeling assumptions and specifications. Implications and mechanisms are discussed.

Automated summary

We find that oil-rich U.S. states experience more corruption than their oil-poor counterparts, but only during periods of high oil prices, suggesting a causal relationship. Results are robust to a variety of modeling assumptions and specifications.