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Exposing Corrupt Politicians: The Effects of Brazil's Publicly Released Audits on Electoral Outcomes

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Author Info
Claudio Ferraz (Instituto de Pesquisa Econômica Aplicada)
Frederico Finan (Department of Economics, University of California, Los Angeles and IZA)

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Abstract

This paper uses publicly released audit reports to study the effects of disclosing information about corruption practices on electoral accountability. In 2003, as part of an anticorruption program, Brazil's federal government began to select municipalities at random to audit their expenditures of federally transferred funds. The findings of these audits were then made publicly available and disseminated to media sources. Using a data set on corruption constructed from the audit reports, we compare the electoral outcomes of municipalities audited before versus after the 2004 elections, with the same levels of reported corruption. We show that the release of the audit outcomes had a significant impact on incumbents' electoral performance, and that these effects were more pronounced in municipalities where local radio was present to divulge the information. Our findings highlight the value of having a more informed electorate and the role played by local media in enhancing political selection. (c) 2008 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology..

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File URL: http://www.mitpressjournals.org/doi/pdfplus/10.1162/qjec.2008.123.2.703
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Publisher Info
Article provided by MIT Press in its journal Quarterly Journal of Economics.

Volume (Year): 123 (2008)
Issue (Month): 2 (05)
Pages: 703-745
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Handle: RePEc:tpr:qjecon:v:123:y:2008:i:2:p:703-745

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Brunetti, Aymo & Weder, Beatrice, 2003. "A free press is bad news for corruption," Journal of Public Economics, Elsevier, vol. 87(7-8), pages 1801-1824, August. [Downloadable!] (restricted)
  2. Timothy Besley & Robin Burgess, 2002. "The Political Economy Of Government Responsiveness: Theory And Evidence From India," The Quarterly Journal of Economics, MIT Press, vol. 117(4), pages 1415-1451, November. [Downloadable!] (restricted)
    Other versions:
  3. Majumdar, Sumon & Mani, Anandi & Mukand, Sharun W., 2004. "Politics, information and the urban bias," Journal of Development Economics, Elsevier, vol. 75(1), pages 137-165, October. [Downloadable!] (restricted)
    Other versions:
  4. Dyck, Alexander & Zingales, Luigi, 2002. "The Corporate Governance Role of the Media," CEPR Discussion Papers 3630, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  5. Matthew Rabin, 1998. "Psychology and Economics," Journal of Economic Literature, American Economic Association, vol. 36(1), pages 11-46, March. [Downloadable!] (restricted)
  6. Persson, Torsten & Roland, Gerard & Tabellini, Guido, 1997. "Separation of Powers and Political Accountability," The Quarterly Journal of Economics, MIT Press, vol. 112(4), pages 1163-1202, November.
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  7. Claudio Ferraz & Frederico Finan, 2007. "Electoral Accountability and Corruption in Local Governments: Evidence from Audit Reports," IZA Discussion Papers 2843, Institute for the Study of Labor (IZA). [Downloadable!]
  8. Alesina, Alberto & Cukierman, Alex, 1990. "The Politics of Ambiguity," The Quarterly Journal of Economics, MIT Press, vol. 105(4), pages 829-50, November. [Downloadable!] (restricted)
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  9. Keefer, Philip & Khemani, Stuti, 2003. "Democracy, public expenditures, and the poor," Policy Research Working Paper Series 3164, The World Bank. [Downloadable!]
  10. David Strömberg, 2004. "Radio's Impact on Public Spending," The Quarterly Journal of Economics, MIT Press, vol. 119(1), pages 189-221, February. [Downloadable!] (restricted)
  11. Timothy Besley & Rohini Pande & Vijayendra Rao, 2005. "Political Selection and the Quality of Government: Evidence from South India," STICERD - Political Economy and Public Policy Paper Series 08, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE. [Downloadable!]
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  12. Grossman, Gene M & Helpman, Elhanan, 1996. "Electoral Competition and Special Interest Politics," Review of Economic Studies, Blackwell Publishing, vol. 63(2), pages 265-86, April. [Downloadable!] (restricted)
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  13. Rudiger Ahrend, 2002. "Press Freedom, Human Capital and Corruption," DELTA Working Papers 2002-11, DELTA (Ecole normale supérieure). [Downloadable!]
  14. 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. [Downloadable!] (restricted)
  15. 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 & Economics, University of Chicago Press, vol. 46(1), pages 269-92, April.
  16. Ritva Reinikka & Jakob Svensson, 2005. "Fighting Corruption to Improve Schooling: Evidence from a Newspaper Campaign in Uganda," Journal of the European Economic Association, MIT Press, vol. 3(2-3), pages 259-267, 04/05. [Downloadable!] (restricted)
  17. Dean Yang, 2005. "Integrity for Hire: An Analysis of a Widespread Program for Combating Customs Corruption," Working Papers 525, Research Seminar in International Economics, University of Michigan. [Downloadable!]
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Pande, Rohini, 2007. "Understanding Political Corruption in Low Income Countries," Working Paper Series rwp07-020, Harvard University, John F. Kennedy School of Government. [Downloadable!]
  2. Fernanda Brollo, 2008. "Who Is Punishing Corrupt Politicians – Voters or the Central Government? Evidence from the Brazilian Anti-Corruption Program," Working Papers 336, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University. [Downloadable!]
  3. Ginger Zhe Jin & Alex Whalley, 2007. "The Power of Attention: Do Rankings Affeect the Financial Resources of Public Colleges?," NBER Working Papers 12941, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  4. Claudio Ferraz & Frederico Finan, 2007. "Electoral Accountability and Corruption in Local Governments: Evidence from Audit Reports," IZA Discussion Papers 2843, Institute for the Study of Labor (IZA). [Downloadable!]
  5. Stefan Krause & Fabio Mendez, 2007. "Corruption and Elections: An Empirical Study for a Cross-Section of Countries," Emory Economics 0709, Department of Economics, Emory University (Atlanta). [Downloadable!]
    Other versions:
  6. Marcos Chamon & João Manoel Pinho de Mello & Sergio Firpo, 2008. "Electoral rules, political competition and fiscal spending : regression discontinuity evidence from Brazilian municipalities," Textos para discussão 559, Department of Economics PUC-Rio (Brazil). [Downloadable!]
  7. Olivier Armantier & Amadou Boly, 2008. "Can Corruption Be Studied in the Lab? Comparing a Field and a Lab Experiment," CIRANO Working Papers 2008s-26, CIRANO. [Downloadable!]
  8. Djankov, Simeon & La Porta, Rafael & López-de-Silanes, Florencio & Shleifer, Andrei, 2009. "Disclosure by Politicians," CEPR Discussion Papers 7168, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  9. 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. [Downloadable!]
    Other versions:
  10. Pande, Rohini, 2007. "Understanding Political Corruption in Low Income Countries," CEPR Discussion Papers 6273, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  11. Fernanda Brollo, 2008. "Who Is Punishing Corrupt Politicians - Voters or the Central Government? Evidence from the Brazilian Anti-Corruption Program," Boston University - Department of Economics - The Institute for Economic Development Working Papers Series dp-168, Boston University - Department of Economics. [Downloadable!]
  12. Fernando Ferreira & Joseph Gyourko, 2007. "Do Political Parties Matter? Evidence from U.S. Cities," NBER Working Papers 13535, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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