This paper estimates the effect of judicial institutions on governance at the local level in Brazil. Our estimation strategy exploits a unique institutional feature of state judiciary branches which assigns prosecutors and judges to the most populous among contiguous counties forming a judiciary district. As a result of this assignment mechanism there are counties with nearly identical populations, some with and some without local judicial presence, which we exploit to impute counterfactual outcomes. Conditional on observable county characteristics, offenses per civil servant are about 35% lower in counties that have a local seat of the state judiciary. The lower incidence of infractions stems mostly from fewer violations of financial management regulations by local administrators, fewer instances of problems in project execution and project managment, fewer cases of non-existent or ineffective civil society oversight and fewer cases of improper handling of remittances to local residents.
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Paper provided by Department of Economics and Business, Universitat Pompeu Fabra in its series Economics Working Papers with number
1143.
Find related papers by JEL classification: H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Health, Education, and Welfare K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law M42 - Business Administration and Business Economics; Marketing; Accounting - - Accounting - - - Auditing
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