American Economic Review
Vol. 104, Issue 8, Pages 2456-2481
We show that isolated capital cities are robustly associated with greater levels of corruption across US states, in line with the view that this isolation reduces accountability. We then provide direct evidence that the spatial distribution of population relative to the capital affects different accountability mechanisms: newspapers cover state politics more when readers are closer to the capital, voters who live far from the capital are less knowledgeable and interested in state politics, and they turn out less in state elections. We also find that isolated capitals are associated with more money in state-level campaigns, and worse public good provision.
Campante, Filipe R., and Quoc-Anh Do. "Isolated Capital Cities, Accountability, and Corruption: Evidence from US States." American Economic Review 104.8 (August 2014): 2456-2481.