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Trust no more? On the lasting effects of corruption scandals

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  • Solé-Ollé, Albert
  • Sorribas-Navarro, Pilar

Abstract

We examine whether the break out of a corruption scandal involving the incumbent undermines trust in government, and whether this effect fades in the short term or whether it has lasting effects. We use a novel dataset with information on local corruption scandals occurring in Spain in the period 1999–2009, and data on the level of trust expressed in local politicians, obtained from a survey conducted in 2009. We find that corruption scandals have a marked effect both on levels of trust in local politicians and on perceptions of corruption. We also show that, while these perceptions gradually revert back to their pre-scandal levels, the effect on trust is more persistent. Using a mediation analysis we show that other side effects of corruption (including, government fragmentation and fiscal stress) are responsible for the persistence of the effect on trust.

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  • Solé-Ollé, Albert & Sorribas-Navarro, Pilar, 2018. "Trust no more? On the lasting effects of corruption scandals," European Journal of Political Economy, Elsevier, vol. 55(C), pages 185-203.
    • Handle: RePEc:eee:poleco:v:55:y:2018:i:c:p:185-203
    DOI: 10.1016/j.ejpoleco.2017.12.003
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    3. Spyridon Boikos & Mehmet Pinar & Thanasis Stengos, 2023. "Bribery, on-the-job training, and firm performance," Small Business Economics, Springer, vol. 60(1), pages 37-58, January.
    4. Miriam Venturini, 2023. "The Imperfect Union: Labor Racketeering, Corruption Exposure, and Its Consequences," Working Papers 202407, University of California at Riverside, Department of Economics.
    5. Giorgio Gulino & Federico Masera, 2023. "Contagious Dishonesty: Corruption Scandals and Supermarket Theft," American Economic Journal: Applied Economics, American Economic Association, vol. 15(4), pages 218-251, October.
    6. Popova, Olga & See, Sarah Grace & Nikolova, Milena & Otrachshenko, Vladimir, 2023. "The Societal Costs of Inflation and Unemployment," IZA Discussion Papers 16541, Institute of Labor Economics (IZA).
    7. Choudhury, Sanchari, 2019. "WTO membership and corruption," European Journal of Political Economy, Elsevier, vol. 60(C).
    8. Miguel Ángel Borrella-Mas & Martin Rode, 2021. "Love is blind: partisan alignment and political corruption in Spain," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 12(3), pages 423-451, September.
    9. Matteo Gamalerio & Massimo Morelli & Carlos Sanz & Albert Solé-Ollé & Pilar Sorribas-Navarro & Olle Folke & Johanna Rickne, 2020. "The Rise of New Political Parties in Western Democracies / El auge de nuevos partidos políticos en las democracias occidentales / L’ascens de nous partits polítics en les democràcies occidentals," IEB Reports ieb_report_2_2020, Institut d'Economia de Barcelona (IEB).
    10. Ravenda, Diego & Giuranno, Michele G. & Valencia-Silva, Maika M. & Argiles-Bosch, Josep M. & García-Blandón, Josep, 2020. "The effects of mafia infiltration on public procurement performance," European Journal of Political Economy, Elsevier, vol. 64(C).

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    Keywords

    Corruption; Trust;

    JEL classification:

    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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