"Rod Blagojevich has really illustrated that the policy of the State of Illinois is that we leave the bank vault open and we allow candidates to go in and grab what they can," said Cynthia Canary, director of the Illinois Campaign for Political Reform. "The intense excesses of Blagojevich beg us to rethink the role of money in Illinois politics."An accompanying article suggests kleptocracy is a suboptimal environment for business growth.
Yes, Illinois is a far cry from Louisiana: Its economy is far more vibrant, its workforce more skilled, its population more educated. But the image of corruption is an important intangible factor that can affect a state's economic vitality, some economic development experts say. It signals to businesses that rules are squishy and the economic deck is stacked.The author found several Wisconsin Ph.D.s, David Audretsch, Tim Bartik, and David Merriman, to amplify and reinforce the fundamental point.
Both articles are correct on the interpretation of events. Both articles miss a more fundamental point: state government is in a position to dispense many favors, which brings forth the rent-seekers. (It reminds me of a wisecrack attributed to Thorstein Veblen, who, when a dean or college president criticized him for playing house with a much younger woman, asked "What do you do when she moves in?") For lack of a better alternative, the model of enumerated and constitutionally limited government powers looks more attractive, as a check on the temptation for rent-seekers to pay and for office-seekers to expect to be paid.
The Tribune is correct in part.
That leaves a political financing system that resembles an addiction. Firms that rely heavily on state business readily donate to candidates as a cost of doing business—and are regularly rewarded with continued contracts and funding. Politicians then demand even higher campaign donations from the firms.Less state business, fewer rents to seek, less pay-for-play, q.e.d.
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