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Corrupting Learning: Evidence from Missing Federal Education Funds in Brazil

Author Info

  • Ferraz, Claudio

    ()

    (Pontifical Catholic University of Rio de Janeiro (PUC-Rio))

  • Finan, Frederico S.

    ()

    (University of California, Berkeley)

  • Moreira, Diana B.

    (Harvard University)

Abstract

This paper examines if money matters in education by looking at whether missing resources due to corruption affect student outcomes. We use data from the auditing of Brazil's local governments to construct objective measures of corruption involving educational block grants transferred from the central government to municipalities. Using variation in the incidence of corruption across municipalities and controlling for student, school, and municipal characteristics, we find a significant negative association between corruption and the school performance of primary school students. Students residing in municipalities where corruption in education was detected score 0.35 standard deviations less on standardized tests, and have significantly higher dropout and failure rates. Using a rich dataset of school infrastructure and teacher and principal questionnaires, we also find that school inputs such as computer labs, teaching supplies, and teacher training are reduced in the presence of corruption. Overall, our findings suggest that in environments where basic schooling resources are lacking, money does matter for student achievement.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6634.

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Length: 44 pages
Date of creation: Jun 2012
Date of revision:
Publication status: published in: Journal of Public Economics, 2012, 96 (9-10), 712-726
Handle: RePEc:iza:izadps:dp6634
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Keywords: local governments; test scores; corruption; Brazil;

Other versions of this item:

Find related papers by JEL classification:
  • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
  • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
  • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures

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  1. Emiliana Vegas, 2005. "Incentives to Improve Teaching : Lessons from Latin America," World Bank Publications, The World Bank, number 7265.
  2. Benjamin Olken, 2005. "Monitoring corruption: Evidence from a field experiment in indonesia," Natural Field Experiments 00317, The Field Experiments Website.
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  5. Claudio Ferraz & Frederico Finan, 2008. "Exposing Corrupt Politicians: The Effects of Brazil's Publicly Released Audits on Electoral Outcomes," The Quarterly Journal of Economics, Oxford University Press, vol. 123(2), pages 703-745.
  6. Das, Jishnu & Dercon, Stefan & Habyarimana, James & Krishnan, Pramila & Muralidharan, Karthik & Sundararaman, Venkatesh, 2011. "School inputs, household substitution, and test scores," Policy Research Working Paper Series 5629, The World Bank.
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  11. Niehaus, Paul & Sukhtankar, Sandip, 2013. "The marginal rate of corruption in public programs: Evidence from India," Journal of Public Economics, Elsevier, vol. 104(C), pages 52-64.
  12. Di Tella, Rafael & Schargrodsky, Ernesto, 2003. "The Role of Wages and Auditing during a Crackdown on Corruption in the City of Buenos Aires," Journal of Law and Economics, University of Chicago Press, vol. 46(1), pages 269-92, April.
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  16. Oriana Bandiera & Andrea Prat & Tommaso Valletti, 2008. "Active and Passive Waste in Government Spending: Evidence from a Policy Experiment," CEIS Research Paper 115, Tor Vergata University, CEIS, revised 14 Jul 2008.
  17. Pritchett, Lant & Filmer, Deon, 1999. "What education production functions really show: a positive theory of education expenditures," Economics of Education Review, Elsevier, vol. 18(2), pages 223-239, April.
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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Corrupción y educación: tres historias
    by Francisco Mejía in Hacia el desarrollo efectivo on 2011-05-10 15:00:49
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
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Cited by:

  1. Lü, Xiaobo, 2015. "Intergovernmental transfers and local education provision — Evaluating China's 8-7 National Plan for Poverty Reduction," China Economic Review, Elsevier, vol. 33(C), pages 200-211.
  2. Botero, Juan & Ponce, Alejandro & Shleifer, Andrei, 2013. "Education, Complaints, and Accountability," Scholarly Articles 11880346, Harvard University Department of Economics.
  3. Julia A. Barde & Juliana Walkiewicz, 2014. "Access to Piped Water and Human Capital Formation - Evidence from Brazilian Primary Schools," Discussion Paper Series 28, Department of International Economic Policy, University of Freiburg, revised Jul 2014.
  4. Niehaus, Paul & Sukhtankar, Sandip, 2013. "The marginal rate of corruption in public programs: Evidence from India," Journal of Public Economics, Elsevier, vol. 104(C), pages 52-64.
  5. Xu, Guo, 2013. "Development through Empowerment: Delivering Effective Public Services – a Literature Review," ADB Economics Working Paper Series 382, Asian Development Bank.
  6. Gadenne, Lucie, 2016. "Tax Me, But Spend Wisely? Sources of Public Finance and Government Accountability," CAGE Online Working Paper Series 289, Competitive Advantage in the Global Economy (CAGE).
  7. Karthik Muralidharan & Jishnu Das & Alaka Holla & Aakash Mohpal, 2014. "The Fiscal Cost of Weak Governance: Evidence from Teacher Absence in India," NBER Working Papers 20299, National Bureau of Economic Research, Inc.
  8. Julia Alexa Barde, 2014. "What Determines Access to Piped Water in Rural Areas?Evidence from Small-scale Supply Systems in Rural Brazil," Discussion Paper Series 30, Department of International Economic Policy, University of Freiburg, revised Dec 2014.

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