Go here to read Swimming Upstream: Struggle Firms in Corrupt Cities in which the authors demonstrate a correlation between municipal corruption and higher borrowing costs in the private sector. In other words,
Ecclesiastes 5:8 comes to mind.A corrupt local environment amplifies the effects of financial distress. Following regional spikes in financial misconduct, credit becomes both more expensive and harder to obtain for nearby borrowers -- even those not implicated themselves. This is particularly harmful for cash-constrained firms, which cut investment more sharply and lay off more workers during industry downturns. Moreover, we find that local waves of financial misconduct are a risk factor for bankruptcy.