Measuring the costs of political corruption

Trying to do some investment research, I got diverted to a couple of articles from the Review of Financial Studies.

In Corruption, Political Connections, and Municipal Finance, the authors assert that “Higher state corruption is associated with greater credit risk and higher bond yields.”  They apparently can measure the corruption and the cost; however the actual article is behind a paywall. I wonder if their results allow us to estimate how many dollars Illinoisans pay in higher debt service due to our political culture, or if the current estimate of “lots and lots” is sufficient.

Do Politically Connected Boards Affect Firm Value? might not seem to be a question worth asking, but it’s nice that academics have, they say, hand-classified corporate board members as “politically connected” to either of the two dominant U S parties. They find that nomination of a politically-connected individual to a board tends to increase stock prices, and that after the 2000 election, stocks associated with Republican boards went up, whereas those associated with Democrats went down.  Again, I cannot see the original article.

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