Perception of Corruption and Public Support for Redistribution in Latin America

Esther Hauk, Mónica Oviedo () and Xavi Ramos ()
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Mónica Oviedo: Universitat Autònoma de Barcelona

No 10854, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper studies the relationship between people's beliefs about the quality of their institutions, as measured by corruption perceptions, and preferences for redistribution in Latin America. Our empirical study is guided by a theoretical model which introduces taxes into Foellmi and Oechslin's (2007) general equilibrium model of non-collusive corruption. In this model perceived corruption influences people's preferences for redistribution through two channels. On the one hand it undermines trust in government, which reduces people's support for redistribution. On the other hand, more corruption decreases own wealth relative to average wealth of below-average-wealth individuals leading to a higher demand for redistribution. Thus, the effect of perceived corruption on redistribution cannot be signed a priori. Our novel empirical findings for Latin America suggest that perceiving corruption in the public sector increases people's support for redistribution. Although the positive channel dominates in the data, we also and evidence for the negative channel from corruption to demand for redistribution via reduced trust.

Keywords: bribery; perception of corruption; political trust; preference for redistribution; Latin America (search for similar items in EconPapers)
JEL-codes: D31 D63 H1 H2 P16 (search for similar items in EconPapers)
Pages: 47 pages
Date: 2017-06
New Economics Papers: this item is included in nep-lam, nep-pbe and nep-pol
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published - published in: European Journal of Political Economy, 2022, 74, 102174

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Related works:
Journal Article: Perception of corruption and public support for redistribution in Latin America (2022)
Working Paper: Perception of Corruption and Public Support for Redistribution in Latin America (2017)
Working Paper: Perception of Corruption and Public Support for Redistribution in Latin America (2017)
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