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Maurizio Mazzocco, UCLA Print
Tuesday, 03 May 2016, 14:00 - 15:15

Maurizio Mazzocco, UCLA

Understanding Corruption: Theory and Evidence from the Audits of Local Governments

Abstract: The goal of this paper is to provide a framework for understanding the decision of politicians to engage in corrupt activities. We developed and estimate a structural model of a politician's decisions to provide public goods and engage in corruption over the span of his political career. While our model is general, we estimate it in the context of municipal governments in Brazil for which we have detailed data on corruption collected using audit reports. Using the estimated model we have simulated the effect of three anti-corruption policies: (i) a raise in the salaries of politicians; (ii) an increase in term limits; (iii) an increase in the probability that a municipality is audited. Our main findings are as follows. The most effective anti-corruption policy is the policy that increases the probability of an audit. This policy has larger effects than increasing the politicians' salaries and term limits for all municipalities. 


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