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The Social Costs of Deregulation in a Fight Against Corruption: A Case Study on Driver’s Licenses in Mexico City

Author

Listed:
  • Grabiszewski Konrad

    (HEC Paris in Qatar, Doha, Qatar)

  • Horenstein Alex

    (Department of Economics, 5452 University of Miami , Coral Gables, USA)

Abstract

Various anti-corruption tools have been proposed in the literature. In this article, we focus on deregulation. By removing red tape, the opportunities for bribery are reduced. At the same time, however, social costs can increase due to reemergence of inefficiencies that the regulation was intended to target in the first place. We analyze data from Mexico City, where a driving test was abolished to combat petty corruption prevalent in testing centers. A natural concern is that roads would become more dangerous. We find that this concern appears to be unwarranted; if anything, roads seem to have become safer.

Suggested Citation

  • Grabiszewski Konrad & Horenstein Alex, 2024. "The Social Costs of Deregulation in a Fight Against Corruption: A Case Study on Driver’s Licenses in Mexico City," Review of Law & Economics, De Gruyter, vol. 20(3), pages 341-355.
    • Handle: RePEc:bpj:rlecon:v:20:y:2024:i:3:p:341-355:n:1001
    DOI: 10.1515/rle-2023-0104
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    More about this item

    Keywords

    anti-corruption; deregulation; driving license; Mexico;
    All these keywords.

    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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