Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/35858
Authors: 
Brollo, Fernanda
Nannicini, Tommaso
Perotti, Roberto
Tabellini, Guido
Year of Publication: 
2010
Series/Report no.: 
IZA Discussion Papers 4706
Abstract: 
The 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 version of the career concerns model of political agency with endogenous entry of political candidates. The evidence refers to municipalities in Brazil, where federal transfers to municipal governments change exogenously according to given population thresholds. We exploit a regression discontinuity design to test the implications of the theory and identify the causal effect of larger federal transfers on political corruption and the observed features of political candidates at the municipal level. In accordance with the predictions of the theory, we find that larger transfers increase political corruption and reduce the quality of candidates for mayor.
Subjects: 
Government spending
corruption
political selection
JEL: 
D72
D73
H40
H77
Document Type: 
Working Paper

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