Corruption is Expensive, But Who Pays the Bills?

One often must look no further than today’s headlines to find examples of personal failure, corporate financial woes and political corruption. But how does political integrity affect the bottom line? A University of Missouri researcher has found that state corruption and political connections have strong effects on the economy and that higher state corruption is associated with greater credit risk, higher bond yields, increased use of external credit enhancements (such as bond insurance) and the utilization of lower quality underwriters.