Electoral Accountability and Corruption: Evidence from the Audits of Local Governments
Political institutions can affect corruption. We use audit reports from an anti-corruption program in Brazil to construct new measures of political corruption in local governments and test whether electoral accountability affects the corruption practices of incumbent politicians. We find significantly less corruption in municipalities where mayors can get reelected. Mayors with re-election incentives misappropriate 27 percent fewer resources than mayors without re-election incentives. These effects are more pronounced among municipalities with less access to information and where the likelihood of judicial punishment is lower. Overall our findings suggest that electoral rules that enhance political accountability play a crucial role in constraining politician's corrupt behavior.
We are grateful to Sandra Black, Allan Drazen, Alain de Janvry, Seema Jayachandran, Joe Hotz, Philip Keefer, Maurizio Mazzocco, Ted Miguel, Enrico Moretti, Sarah Reber, James Robinson, Gerard Roland, Elisabeth Sadoulet, Helena Svaleryd, Duncan Thomas and to conference and seminar participants at CERGE-EI, Dartmouth College, EPGE-FGV, IADB, IPEA-Rio, LACEA-Political Economy Network, MIT, NBER, NEUDCBrown, Penn State University, PUC-Rio, Stanford GSB, UC-Berkeley, UCLA, University of Maryland, Wharton Business School, World Bank, and Yale University. We also thank the staff at the Controladoria Geral da União (CGU) for information about the details of the anti-corruption program and Paula Aniceto, Leonardo Costa and Tássia Cruz for excellent research assistance. Ferraz gratefully acknowledges financial support from CAPES-Brazil. The views expressed herein are those of the author(s) and do not necessarily reflect the views of the National Bureau of Economic Research.
Claudio Ferraz & Frederico Finan, 2011. "Electoral Accountability and Corruption: Evidence from the Audits of Local Governments," American Economic Review, American Economic Association, vol. 101(4), pages 1274-1311, June. citation courtesy of