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Do Government Audits Reduce Corruption: Estimating the Impacts of Exposing Corrupt Politicians

Author

Listed:
  • Eric Avis

  • Claudio Ferraz

  • Frederico Finan

Abstract

This paper examines the extent to which government audits of public resources can reduce corruption by enhancing political and judiciary accountability. It does so in the context of Brazil’s anti-corruption program, which randomly audits municipalities for their use of federal funds. It finds that being audited in the past reduces future corruption by 8 percent, while also increasing the likelihood of experiencing a subsequent legal action by 20 percent. This paper interprets these reduced-form findings through a political agency model, which it structurally estimates. [Working Paper 22443]

Suggested Citation

  • Eric Avis & Claudio Ferraz & Frederico Finan, 2016. "Do Government Audits Reduce Corruption: Estimating the Impacts of Exposing Corrupt Politicians," Working Papers id:11148, eSocialSciences.
    • Handle: RePEc:ess:wpaper:id:11148
    Note: Institutional Papers
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    Keywords

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    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • H83 - Public Economics - - Miscellaneous Issues - - - Public Administration
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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