This edited volume provides a fine start toward a definitive treatment of corruption and reform in U.S. economic history. The volume promises lessons to reduce corruption and promote economic development (p. 4). Although the well-executed chapters deserve reading, they highlight the ambiguity and apparent difficulty of studying corruption.

Predictably in a volume on corruption, definitional issues loom. The authors offer several meanings of corruption: “the misuse of public power for private purposes (Menes, p. 65),” “[t]heft from the public (Cutler and Miller, p. 154),” “sale of public assets for private gain (Bodenhorn, p. 231),” “the illicit sale of political influence (Troesken, p. 263, original italics),” and illegal subversion of public policy (Fishback, p. 286). In general, the book defines corruption as illegal interactions with public officials in order to advance private economic interests. This includes bribery, kickbacks, embezzlement, skimming from public contracts, and payments to manipulate laws and regulations.

In a thought-provoking essay, impressive for the scope of scholarship, John Joseph Wallis distinguishes systematic from venal corruption. Systematic corruption occurs when public officials constrain the economy in order to preserve political power. This is the debilitating form that can cripple a society's health. Except for certain cases in the early nineteenth century (such as bank chartering, as covered by Howard Bodenhorn's chapter), the United States avoided this type of corruption. Written state constitutions and the transition to general, rather than special, state incorporation laws played important roles in this achievement. In contrast, venal corruption entails using political means to advance private economic ends. This is the common, but less damaging, form of corruption, leading to suboptimal resource allocation but not structural impairment.

While intriguing, the distinction seems unstable. Is the quest for power not often motivated by a desire to promote economic position? Can venal efforts to advance merely private interests lead to restrictions that become systematic? Here is the dubious difference: “Systematic corruption occurs when politics corrupts economics…. Venal corruption occurs when economics corrupts politics (p. 25).” Wallis's treatment in developing the argument merits attention, but the concepts require further refinement.

Having defined corruption, the next step is measurement. The authors are particularly inventive here—but in ways that yield conflicting conclusions about the pattern of corruption over time. In the introductory chapter the editors, Edward L. Glaeser and Claudia Goldin, use adjusted word counts of “corruption” and “fraud” from newspaper articles between 1815 and 1975, finding that corruption was most prevalent during the nineteenth century and then declined from the mid-1870s. They note that today some consider the United States among the least corrupt economies (p. 1). Yet, Rebecca Menes, using biographical information for mayors of large cities, finds that corruption peaked between 1880 and 1930. Moreover, Stanley L. Engerman and Kenneth L. Sokoloff suggest that corruption, or something like it, has never been as significant as it is today.

On two levels the volume's focus on corruption seems frustrated. First, in several chapters corruption plays little or no role. For example, Matthew Gentzkow, with Glaeser and Goldin, document the rise of a neutral press but do not test whether it controlled corruption. Engerman and Sokoloff's review of Erie Canal construction touches on political manipulation and partisan behavior but not corruption per se. Naomi R. Lamoreaux and Jean-Laurent Rosenthal offer an elegant analysis of the rise of the corporate form of business organization relative to partnership that says nothing about corruption. The interesting analysis of the food and drug protection acts by Marc T. Law and Gary D. Libecap provide valuable insights into who gained and who lost, but there is no real discussion of corruption in the sense of violations of law-enshrined norms.

Second, some chapters find or assert that corruption was not important for their topic. After applying her measure of corruption in urban areas, Menes (p. 67) finds little effect of corruption on economic growth; indeed, corruption does not even seem to have impaired the quality of government (p. 69). David Cutler and Grant Miller (p. 154) assert, but do not show, that corruption fails to explain the replacement of private by public municipal water systems. Similarly, Price V. Fishback finds that mining and manufacturing employers subverted employment safety legislation but that there was little evidence of “bribery or other illegal corruption (p. 314).” For a volume on corruption, it seems ironic that there was so little of it or that it did not matter.

Some chapters explicitly deal with corruption. Bodenhorn's piece documents the rise of corruption in New York bank corporation charters, followed by the decline in corruption via free banking. Werner Troesken's discussion of the evolution of utility regulation places corruption and reform at the center of the explanation for continuous regulatory regime change. The final chapter by Wallis, Fishback, and Shawn Kantor argues that pre-1933 local corruption in distributing social welfare payments did not afflict New Deal programs because it was in President Roosevelt's political interest to control corruption.

This volume contains a number of intriguing ideas. Mention has been made of Wallis's distinction between systematic and venal corruption. There is also what might be called the regulatory dialectic, developed in Troesken's application of Mancur Olson's notion of regulatory cycles: Every regulatory regime is corruptible; what matters is having the flexibility in the political/economic environment to replace corrupt regimes with something different—something, we must recognize, that will eventually itself become corrupted. There is also the Wallis, Fishback, and Kantor notion that corruption can be constrained if it is in the political interest of officials to do so. How to design incentive mechanisms to accomplish that would be worth study.

Embrace competition. This is the volume's main lesson from the American experience with corruption and reform. Separation of powers and balanced government injected competition in public power and constrained corruption in New York bank chartering (Bodenhorn) and in the distribution of relief during the New Deal (Wallis, Fishback, and Kantor), and were critical to preventing systematic corruption (Wallis). Competition also proved important for moving newspapers from explicitly biased voices toward a more neutral, objective standard—potentially constraining corruption (Gentzkow, Glaeser, and Goldin). And competitive elections compelled even urban political machines to provide quality government services (Menes, pp. 85–86).

This is a valuable volume by many of the leading scholars in U.S. economic history. It is a fascinating attempt to deal with an important issue in economic development by looking to the lessons of history. A part of the fascination lies in the apparent difficulty of clearly describing corruption's historical role and extracting useable lessons. Worth reading, but not a roadmap to reform.