Turning a blind eye: a Regression Discontinuity Design Analysis of Party-Based Support for Corruption in Brazil

Louis Graham

No 2016-18, CSAE Working Paper Series from Centre for the Study of African Economies, University of Oxford

Abstract: While corruption has long been conceptualised using the Principal-Agent framework, recent academic literature has proposed that in many countries, corruption is used as a political tool by 'unprincipled principals'. Using data from a corruption audit programme in Brazil and an RDD design, I study whether a state governor and municipal mayor being of the same party increases corruption linked to the mayor. I find evidence that when the governor's party wins the municipal mayoral election, corruption declines by 60-80% of the mean corruption level, and by 100-120% for larger municipalities. This is consistent with a model in which governors use corruption to gain control over mayors through potential blackmail, and in which governors want to prevent their party being associated with corruption to protect their re-election chances. I find further evidence consistent with the first argument. Much weaker evidence is found consistent with the second.

Keywords: Corruption; Political Networks; Regression Discontinuity Design (search for similar items in EconPapers)
JEL-codes: C31 D72 D73 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-cdm and nep-pol
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Persistent link: https://EconPapers.repec.org/RePEc:csa:wpaper:2016-18

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