While the northern part of Illinois has long been thought to be the hub of the state’s commerce and population, it may be costing the rest of the state’s money. In a report by the University of Illinois’ Gies College of Business reported by The Center Square, corruption costs due to court costs and fines are higher in the northern part of the state compared to central and southern Illinois.
According to Assistant Professor Roger White, co-author of the study, and professor of economics at Arizona State University’s W.P. Carey School of business, the market would see a 1.5 percent increase in the state’s economy if the state could transport Central Illinois’ non-corrupt business climate to the northern part of the state. White went on to say that perception is translated into real money when investors value a firm lower due to its location in Illinois.
According to the report, the more a business in Illinois has contact with the government, the more likely illegal activity and corruption is likely to happen. University of Illinois Professor Nerissa Brown found using Department of Justice corruption convictions data from 1996-2013 and a sample of U.S. firms that the consequences of political corruption are exacerbated for firms operating in competitive product markets and mitigated for firms that are subject to external monitoring by state governments or monitoring induced by disclosure transparency. Brown said that further harm is done to businesses when state government contracts are handled by a single person or party. The regional data on Illinois was extracted specifically for the Center Square’s report.
The study was published in the Journal of Business Ethics in July.