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Exposing Corrupt Politicians: The Effect of Brazil's Publicly Released Audits on Electoral Outcomes

  • Author(s): Finan, Frederico
  • Ferraz, Claudio
  • et al.
Abstract

This paper examines the extent to which access to information enhances political accountability. Based upon the results of Brazil’s recent anti-corruption program that randomly audits municipal expenditures of federally-transferred funds, it estimates the effect of the disclosure of local government corruption practices upon the re-election success of incumbent mayors in municipal elections. Comparing municipalities which were randomly audited before the elections with those audited after, the analysis shows that the disclosure of audit results had a significant impact on the re-election rates of mayors found to be corrupt. For a one standard deviation increase in reported corruption, the audit policy reduced the incumbent’s likelihood of re-election by 25 percent. This effect is more pronounced in municipalities where radio stations are present and higher levels of corruption are identified. These findings highlight the value of information and the role of the media in reducing informational asymmetries in the political process, thus enabling voters to not only hold corrupt politicians accountable but also to reward non-corrupt politicians.

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