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Corruption and legislature size: Evidence from Brazil

Diogo G.C. Britto and Stefano Fiorin

European Journal of Political Economy, 2020, vol. 65, issue C

Abstract: This paper studies whether and how legislatures affect political corruption. Using a regression discontinuity design in the context of Brazilian municipalities, we find a positive causal impact of council size on corruption levels, as detected by random federal audits. This indicates that an extra councilor represents an additional political actor potentially interested in diverting public resources, which we define as a rent extraction effect. However, we find further evidence that, in some contexts, larger councils enhance the representation of opposition parties and effectively increase monitoring over the executive, attenuating the rent extraction effect. Namely, in municipalities where opposition parties are typically underrepresented, the additional seat in the council is absorbed by the opposition and corruption outcomes do not worsen. In addition, only in such context, mayors are more commonly sentenced for misconduct in office by judicial authorities, whose investigations anecdotally often originates from councilors denouncing mayors to local courts. Overall, our findings show that legislature size is detrimental to corruption outcomes but less so where the representation of opposition parties improves with the enlargement of the legislature.

Keywords: Corruption; Council size; Legislative oversight; Regression discontinuity (search for similar items in EconPapers)
JEL-codes: D72 D73 H72 (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:eee:poleco:v:65:y:2020:i:c:s0176268020300884

DOI: 10.1016/j.ejpoleco.2020.101940

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