IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp6634.html
   My bibliography  Save this paper

Corrupting Learning: Evidence from Missing Federal Education Funds in Brazil

Author

Listed:
  • 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.

Suggested Citation

  • Ferraz, Claudio & Finan, Frederico S. & Moreira, Diana B., 2012. "Corrupting Learning: Evidence from Missing Federal Education Funds in Brazil," IZA Discussion Papers 6634, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp6634
    as

    Download full text from publisher

    File URL: https://docs.iza.org/dp6634.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Eric Hanushek & Ludger Woessmann, 2012. "Do better schools lead to more growth? Cognitive skills, economic outcomes, and causation," Journal of Economic Growth, Springer, vol. 17(4), pages 267-321, December.
    2. Abhijit V. Banerjee & Shawn Cole & Esther Duflo & Leigh Linden, 2007. "Remedying Education: Evidence from Two Randomized Experiments in India," The Quarterly Journal of Economics, Oxford University Press, vol. 122(3), pages 1235-1264.
    3. Menezes-Filho, Naercio & Pazello, Elaine, 2007. "Do teachers' wages matter for proficiency? Evidence from a funding reform in Brazil," Economics of Education Review, Elsevier, vol. 26(6), pages 660-672, December.
    4. Nazmul Chaudhury & Jeffrey Hammer & Michael Kremer & Karthik Muralidharan & F. Halsey Rogers, 2006. "Missing in Action: Teacher and Health Worker Absence in Developing Countries," Journal of Economic Perspectives, American Economic Association, vol. 20(1), pages 91-116, Winter.
    5. Esther Duflo & Rema Hanna & Stephen P. Ryan, 2012. "Incentives Work: Getting Teachers to Come to School," American Economic Review, American Economic Association, vol. 102(4), pages 1241-1278, June.
    6. Andrei Shleifer & Robert W. Vishny, 1993. "Corruption," The Quarterly Journal of Economics, Oxford University Press, vol. 108(3), pages 599-617.
    7. 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.
    8. Jakob Svensson, 2005. "Eight Questions about Corruption," Journal of Economic Perspectives, American Economic Association, vol. 19(3), pages 19-42, Summer.
    9. Martina Björkman & Jakob Svensson, 2009. "Power to the People: Evidence from a Randomized Field Experiment on Community-Based Monitoring in Uganda," The Quarterly Journal of Economics, Oxford University Press, vol. 124(2), pages 735-769.
    10. repec:hrv:faseco:30747194 is not listed on IDEAS
    11. Glaeser, Edward L. & Saks, Raven E., 2006. "Corruption in America," Journal of Public Economics, Elsevier, vol. 90(6-7), pages 1053-1072, August.
    12. Fan, C. Simon & Lin, Chen & Treisman, Daniel, 2009. "Political decentralization and corruption: Evidence from around the world," Journal of Public Economics, Elsevier, vol. 93(1-2), pages 14-34, February.
    13. Fisman, Raymond & Gatti, Roberta, 2002. "Decentralization and corruption: evidence across countries," Journal of Public Economics, Elsevier, vol. 83(3), pages 325-345, March.
    14. Emiliana Vegas, 2005. "Incentives to Improve Teaching : Lessons from Latin America," World Bank Publications - Books, The World Bank Group, number 7265.
    15. Petra E. Todd & Kenneth I. Wolpin, 2003. "On The Specification and Estimation of The Production Function for Cognitive Achievement," Economic Journal, Royal Economic Society, vol. 113(485), pages 3-33, February.
    16. 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.
    17. Damon Clark, 2009. "The Performance and Competitive Effects of School Autonomy," Journal of Political Economy, University of Chicago Press, vol. 117(4), pages 745-783, August.
    18. Jishnu Das & Stefan Dercon & James Habyarimana & Pramila Krishnan & Karthik Muralidharan & Venkatesh Sundararaman, 2013. "School Inputs, Household Substitution, and Test Scores," American Economic Journal: Applied Economics, American Economic Association, vol. 5(2), pages 29-57, April.
    19. Edward L. Glaeser & Claudia Goldin, 2006. "Corruption and Reform: Introduction," NBER Chapters, in: Corruption and Reform: Lessons from America's Economic History, pages 2-22, National Bureau of Economic Research, Inc.
    20. Oriana Bandiera & Andrea Prat & Tommaso Valletti, 2009. "Active and Passive Waste in Government Spending: Evidence from a Policy Experiment," American Economic Review, American Economic Association, vol. 99(4), pages 1278-1308, September.
    21. 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.
    22. Katherine Baicker & Douglas Staiger, 2005. "Fiscal Shenanigans, Targeted Federal Health Care Funds, and Patient Mortality," The Quarterly Journal of Economics, Oxford University Press, vol. 120(1), pages 345-386.
    23. Cristian Pop-Eleches & Miguel Urquiola, 2013. "Going to a Better School: Effects and Behavioral Responses," American Economic Review, American Economic Association, vol. 103(4), pages 1289-1324, June.
    24. Karthik Muralidharan & Venkatesh Sundararaman, 2011. "Teacher Performance Pay: Experimental Evidence from India," Journal of Political Economy, University of Chicago Press, vol. 119(1), pages 39-77.
    25. Benjamin A. Olken, 2007. "Monitoring Corruption: Evidence from a Field Experiment in Indonesia," Journal of Political Economy, University of Chicago Press, vol. 115, pages 200-249.
    26. 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 269-292, April.
    27. Olken, Benjamin A., 2006. "Corruption and the costs of redistribution: Micro evidence from Indonesia," Journal of Public Economics, Elsevier, vol. 90(4-5), pages 853-870, May.
    28. Ritva Reinikka & Jakob Svensson, 2004. "Local Capture: Evidence from a Central Government Transfer Program in Uganda," The Quarterly Journal of Economics, Oxford University Press, vol. 119(2), pages 679-705.
    29. Paolo Mauro, 1995. "Corruption and Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 110(3), pages 681-712.
    30. Alberto Abadie & Guido W. Imbens, 2006. "Large Sample Properties of Matching Estimators for Average Treatment Effects," Econometrica, Econometric Society, vol. 74(1), pages 235-267, January.
    31. Hanushek, E.A.omson, W., 1996. "Assessing the Effects of School Resources on Student Performance : An Update," RCER Working Papers 424, University of Rochester - Center for Economic Research (RCER).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ferraz, Claudio & Finan, Frederico & Moreira, Diana B., 2012. "Corrupting learning," Journal of Public Economics, Elsevier, vol. 96(9-10), pages 712-726.
    2. Krisztina Kis-Katos & Günther G. Schulze, 2013. "Corruption in Southeast Asia: a survey of recent research," Asian-Pacific Economic Literature, Asia Pacific School of Economics and Government, The Australian National University, vol. 27(1), pages 79-109, May.
    3. Oana Borcan & Mikael Lindahl & Andreea Mitrut, 2017. "Fighting Corruption in Education: What Works and Who Benefits?," American Economic Journal: Economic Policy, American Economic Association, vol. 9(1), pages 180-209, February.
    4. Abhijit Banerjee & Rema Hanna, 2012. "Corruption," Introductory Chapters, in: Sendhil Mullainathan & Robert Gibbons & John Roberts (ed.),The Handbook of Organizational Economics, Princeton University Press.
      • Hanna, Rema N. & Mullainathan, Sendhil & Banerjee, Abhijit, 2012. "Corruption," Scholarly Articles 8830779, Harvard Kennedy School of Government.
      • Banerjee, Abhijit & Hanna, Rema & Mullainathan, Sendhil, 2012. "Corruption," Working Paper Series rwp12-023, Harvard University, John F. Kennedy School of Government.
      • Abhijit Banerjee & Rema Hanna & Sendhil Mullainathan, 2012. "Corruption," Working Papers id:4952, eSocialSciences.
      • Abhijit Banerjee & Sendhil Mullainathan & Rema Hanna, 2012. "Corruption," NBER Working Papers 17968, National Bureau of Economic Research, Inc.
    5. Yan Leung Cheung & P. Raghavendra Rau & Aris Stouraitis, 2012. "How much do firms pay as bribes and what benefits do they get? Evidence from corruption cases worldwide," NBER Working Papers 17981, National Bureau of Economic Research, Inc.
    6. Ferraz, Claudio & Finan, Frederico S., 2007. "Electoral Accountability and Corruption in Local Governments: Evidence from Audit Reports," IZA Discussion Papers 2843, Institute of Labor Economics (IZA).
    7. Gallego, Jorge & Rivero, Gonzalo & Martínez, Juan, 2021. "Preventing rather than punishing: An early warning model of malfeasance in public procurement," International Journal of Forecasting, Elsevier, vol. 37(1), pages 360-377.
    8. Gutmann, Jerg & Padovano, Fabio & Voigt, Stefan, 2020. "Perception vs. experience: Explaining differences in corruption measures using microdata," European Journal of Political Economy, Elsevier, vol. 65(C).
    9. Roberto Burguet & Juan-José Ganuza & José García-Montalvo, 2016. "The Microeconomics of Corruption. A Review of Thirty Years of Research," Working Papers 908, Barcelona Graduate School of Economics.
    10. Claudio Ferraz & Frederico Finan, 2011. "Electoral Accountability and Corruption: Evidence from the Audits of Local Governments," American Economic Review, American Economic Association, vol. 101(4), pages 1274-1311, June.
    11. Auriol, Emmanuelle & Straub, Stéphane & Flochel, Thomas, 2016. "Public Procurement and Rent-Seeking: The Case of Paraguay," World Development, Elsevier, vol. 77(C), pages 395-407.
    12. Borcan, Oana & Lindahl, Mikael & Mitrut, Andreea, 2014. "The impact of an unexpected wage cut on corruption: Evidence from a “Xeroxed” exam," Journal of Public Economics, Elsevier, vol. 120(C), pages 32-47.
    13. Valsecchi, Michele, 2016. "Corrupt Bureaucrats: The Response of Non-Elected Officials to Electoral Accountability," Working Papers in Economics 684, University of Gothenburg, Department of Economics.
    14. Muralidharan, Karthik & Das, Jishnu & Holla, Alaka & Mohpal, Aakash, 2017. "The fiscal cost of weak governance: Evidence from teacher absence in India," Journal of Public Economics, Elsevier, vol. 145(C), pages 116-135.
    15. Jeffrey B. Nugent, 2014. "Detecting Corruption And Evaluating Programs To Control It: Some Lessons For Mena," World Scientific Book Chapters, in: Ishac Diwan (ed.), UNDERSTANDING THE POLITICAL ECONOMY OF THE ARAB UPRISINGS, chapter 7, pages 131-163, World Scientific Publishing Co. Pte. Ltd..
    16. Benjamin A. Olken, 2020. "Banerjee, Duflo, Kremer, and the Rise of Modern Development Economics," Scandinavian Journal of Economics, Wiley Blackwell, vol. 122(3), pages 853-878, July.
    17. Lambsdorff Johann Graf & Schulze Günther G., 2015. "Guest Editorial: Special Issue on Corruption at the Grassroots-level: What Can We Know About Corruption?," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 235(2), pages 100-114, April.
    18. Maarten Voors & Ty Turley & Erwin Bulte & Andreas Kontoleon & John A. List, 2018. "Chief for a Day: Elite Capture and Management Performance in a Field Experiment in Sierra Leone," Management Science, INFORMS, vol. 64(12), pages 5855-5876, December.
    19. Olken, Benjamin A., 2009. "Corruption perceptions vs. corruption reality," Journal of Public Economics, Elsevier, vol. 93(7-8), pages 950-964, August.
    20. Hao, Zhuoqun & Liu, Yu & Zhang, Jinfan & Zhao, Xiaoxue, 2020. "Political connection, corporate philanthropy and efficiency: Evidence from China’s anti-corruption campaign," Journal of Comparative Economics, Elsevier, vol. 48(3), pages 688-708.

    More about this item

    Keywords

    local governments; test scores; corruption; Brazil;
    All these keywords.

    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

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp6634. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/izaaade.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Holger Hinte (email available below). General contact details of provider: https://edirc.repec.org/data/izaaade.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.