Electoral Accountability and Corruption: Evidence from the Audits of Local Governments
American Economic Review
vol. 101,
no. 4, June 2011
(pp. 1274-1311)
Abstract
We show that political institutions affect corruption levels. We use audit reports 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 reelection incentives misappropriate 27 percent fewer resources than mayors without reelection 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. (JEL D72, K42, O17)Citation
Ferraz, Claudio, and Frederico Finan. 2011. "Electoral Accountability and Corruption: Evidence from the Audits of Local Governments." American Economic Review, 101 (4): 1274-1311. DOI: 10.1257/aer.101.4.1274Additional Materials
JEL Classification
- D72 Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- K42 Illegal Behavior and the Enforcement of Law
- O17 Formal and Informal Sectors; Shadow Economy; Institutional Arrangements