Term limits and corruption: Evidence from U.S. states

Term limits exert two opposing effects on political corruption: they increase the incidence (frequency) while reducing the magnitude (average cost) of corrupt acts. Higher incidence arises from weakened electoral accountability during lame-duck and penultimate terms. Lower magnitude results from shorter tenures that impede the formation of extensive corrupt networks. Using cross-state variation in U.S. gubernatorial term-limit regimes, the analysis reveals that penultimate-term effects can raise the incidence of corruption by 28 %, yet concurrent reductions in magnitude more than offset this increase. Building on the well-established negative association between economic growth and corruption, the analysis employs observed state-level growth as a proxy for the aggregate impact of corruption. The findings indicate that stricter term limits are associated with lower overall corruption, underscoring the potential role of term limits as an institutional safeguard against political corruption.