Accountability, Political Capture and Selection into Politics: Evidence from Peruvian Municipalities

We estimate the effects of political accountability on the selection of politicians when accountability mechanisms are prone to political capture. Using a comprehensive dataset containing the characteristics and background of candidates running for mayor in the last three local elections in Peru, and a close election sharp regression discontinuity design, we compare candidates running for mayor in districts where the incumbent was ousted from office through a recall referendum in the previous electoral term with those who run in districts where the recall referendum failed by a small margin. Candidates in municipalities where the incumbent was recalled are less educated, have less experience in elected offices and in the public sector. These candidates are also less representative of indigenous groups. Our findings are consistent with a framework where potential candidates learn about an accountability mechanism which is prone to political capture, distorting the main objectives of improving the quality of governance, and instead discouraging high quality candidates to run. The negative selection of candidates is partially offset by voters, who elect the best politician out of a lower quality pool of candidates, but still we observe effects on policy outcomes.