The Political Resource Curse
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In this article, the effect of additional government revenues on political corruption and on the quality of politicians was studied with theory and data in Brazil, where federal transfers to municipal governments change exogenously at given population thresholds, allowing them to implement a regression discontinuity design.Abstract:
This paper studies the effect of additional government revenues on political corruption and on the quality of politicians, both with theory and data. The theory is based on a political agency model with career concerns and endogenous entry of candidates. The data refer to Brazil, where federal transfers to municipal governments change exogenously at given population thresholds, allowing us to implement a regression discontinuity design. The empirical evidence shows that larger transfers increase observed corruption and reduce the average education of candidates for mayor. These and other more specific empirical results are in line with the predictions of the theory. (JEL D72, D73, H77, O17, O18)read more
Figures
Figure 3 – Population Distribution (<50,941) 
Table 14 – Robustness Checks: Opponents’ Characteristics and Election Outcome 
Table 9 – IV Estimates: Corruption Measures 
Table 15 – IV Estimates: Politicians’ Characteristics in All Municipalities 
Figure 1 – Actual and Theoretical FPM Transfers 
Table 18 – Opponents’ Characteristics and the Impact of Transfers on Corruption
Citations
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Journal ArticleDOI
Electoral Accountability and Corruption: Evidence from the Audits of Local Governments
Claudio Ferraz,Frederico Finan +1 more
Abstract: We show that political institutions affect corruption levels. We use audit reports in Brazil to construct new measures of political cor ruption in local governments and test whether electoral account ability affects the corruption practices of incumbent politicians. We find significantly less corruption in municipalities where mayors can get reelected. Mayors with reelection incentives misappropriate 27 percent fewer resources than mayors without reelection incentives. These effects are more pronounced among municipalities with less access to information and where the likelihood of judicial punish ment is lower. Overall our findings suggest that electoral rules that enhance political accountability play a crucial role in constraining politician's corrupt behavior. {.JEL D72, K42, 017)
ReportDOI
Corruption in Developing Countries
Benjamin A. Olken,Rohini Pande +1 more
Abstract: Recent years have seen a remarkable expansion in economists' ability to measure corruption. This in turn has led to a new generation of well-identified, microeconomic studies. We review the evidence on corruption in developing countries in light of these recent advances, focusing on three questions: how much corruption is there, what are the efficiency consequences of corruption, and what determines the level of corruption? We find robust evidence that corruption responds to standard economic incentive theory but also that the effects of anticorruption policies often attenuate as officials find alternate strategies to pursue rents.
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What Have We Learned about the Resource Curse
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Thomas Fujiwara,Thomas Fujiwara +1 more
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The value of local political connections in a low.corruption environment.
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References
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TL;DR: In this paper, a test of manipulation related to continuity of the running variable density function was developed for popular elections to the House of Representatives and roll call voting in the House, where sorting is neither expected nor found.