Do Government Audits Reduce Corruption? Estimating the Impacts of Exposing Corrupt Politicians

Eric Avis, Claudio Ferraz and Frederico Finan

No 652, Textos para discussão from Department of Economics PUC-Rio (Brazil)

Abstract: Political corruption is considered a major impediment to economic development, and yet it remains pervasive throughout the world. This paper examines the extent to which government audits of public resources can reduce corruption by enhancing political and judiciary accountability. We do so in the context of Brazil’s anti-corruption program, which randomly audits municipalities for their use of federal funds. We find that being audited in the past reduces future corruption by 8 percent, while also increasing the likelihood of experiencing a subsequent legal action by 20 percent. We interpret these reduced-form findings through a political agency model, which we structurally estimate. Based on our estimated model, the reduction in corruption comes mostly from the audits increasing the perceived threat of the non-electoral costs of engaging in corruption.

Pages: 48p
Date: 2016-07
New Economics Papers: this item is included in nep-dev, nep-lam, nep-law and nep-pol
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19)

Downloads: (external link)
http://www.econ.puc-rio.br/uploads/adm/trabalhos/files/td652.pdf (application/pdf)

Related works:
Journal Article: Do Government Audits Reduce Corruption? Estimating the Impacts of Exposing Corrupt Politicians (2018)
Working Paper: Do Government Audits Reduce Corruption: Estimating the Impacts of Exposing Corrupt Politicians (2016)
Working Paper: Do Government Audits Reduce Corruption? Estimating the Impacts of Exposing Corrupt Politicians (2016)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:rio:texdis:652

Access Statistics for this paper

More papers in Textos para discussão from Department of Economics PUC-Rio (Brazil) Contact information at EDIRC.
Bibliographic data for series maintained by ().