Democracy Corrupted: Apex Corruption and the Erosion of Democratic Values

Eduardo Rivera, Enrique Seira and Saumitra Jha
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Eduardo Rivera: MIT
Enrique Seira: MSU

Research Papers from Stanford University, Graduate School of Business

Abstract: Democratic values are eroding just as citizens perceive increasing corruption, with numerous cases implicating the highest-level politicians. Could perceived increases in apex corruption be weakening democracy? We first present event study analyses of more than 170 high-profile corruption scandals involving some of the most prominent politicians in 17 Latin American countries. We show that in the aftermath of such apex corruption scandals, support for democracy falls by 0.07ð ‘ ð ‘‘, support for authoritarianism rises by 11% and violent protests rise by 70%. We complement these results with a field experiment in Mexico. Randomized exposure to footage of apex corruption scandals, particularly implicating politicians known for their anticorruption platforms, decreases individuals’ support for democracy by 0.15ð ‘ ð ‘‘, willingness to trust politicians and neighbors in incentivized games by 18% and 11%, volunteering as election observers by 45%, and actual voter turnout by about 5ð ‘ ð ‘ , while raising stealing from local mayors by 4%. The undermining of democratic values produces latent effects that even cumulate four months later. Seeking solutions, priming national identity proved an unsuccessful antidote, but providing exposure to national stock index funds holds some promise.

JEL-codes: C72 C93 D02 D72 D73 D91 K42 (search for similar items in EconPapers)
Date: 2024-05
New Economics Papers: this item is included in nep-exp, nep-lam, nep-law, nep-pol and nep-soc
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Persistent link: https://EconPapers.repec.org/RePEc:ecl:stabus:4166

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