The Social Costs of Deregulation in a Fight Against Corruption: A Case Study on Driver’s Licenses in Mexico City

Grabiszewski Konrad () and Horenstein Alex ()
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Grabiszewski Konrad: HEC Paris in Qatar, Doha, Qatar
Horenstein Alex: Department of Economics, 5452 University of Miami , Coral Gables, USA

Review of Law & Economics, 2024, vol. 20, issue 3, 341-355

Abstract: Various anti-corruption tools have been proposed in the literature. In this article, we focus on deregulation. By removing red tape, the opportunities for bribery are reduced. At the same time, however, social costs can increase due to reemergence of inefficiencies that the regulation was intended to target in the first place. We analyze data from Mexico City, where a driving test was abolished to combat petty corruption prevalent in testing centers. A natural concern is that roads would become more dangerous. We find that this concern appears to be unwarranted; if anything, roads seem to have become safer.

Keywords: anti-corruption; deregulation; driving license; Mexico (search for similar items in EconPapers)
JEL-codes: D73 H11 K42 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1515/rle-2023-0104

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