Working Paper: NBER ID: w14937
Authors: Claudio Ferraz; Frederico Finan
Abstract: Political institutions can affect corruption. We use audit reports from an anti-corruption program in Brazil to construct new measures of political corruption in local governments and test whether electoral accountability affects the corruption practices of incumbent politicians. We find significantly less corruption in municipalities where mayors can get reelected. Mayors with re-election incentives misappropriate 27 percent fewer resources than mayors without re-election incentives. These effects are more pronounced among municipalities with less access to information and where the likelihood of judicial punishment is lower. Overall our findings suggest that electoral rules that enhance political accountability play a crucial role in constraining politician's corrupt behavior.
Keywords: electoral accountability; corruption; local governments; Brazil
JEL Codes: D72; D78; H41; O17
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Local institutional contexts (F55) | Corruption (D73) |
| Electoral accountability (D72) | Corruption (D73) |
| First-term mayors (H70) | Corruption (D73) |
| Second-term mayors (H79) | Corruption (D73) |
| Reelection incentives (D72) | Corruption (D73) |