Do Individual Disclosure Rules for Parliamentarians Improve Government Effectiveness?

Abstract

The pros and cons of stricter disclosure rules for parliamentarians are hotly debated. Some argue that disclosure rules for parliamentarians increase transparency of the legislative branch, leading to lower levels of rent-seeking and corruption, increased citizen trust in parliament, and better quality of law-making. Others argue that disclosure rules endanger the privacy of parliamentarians, that their introduction would stop businesspeople and lawyers from running for seats, which would decrease the quality of law-making. This is the first attempt to empirically test these conjectures on the composition of parliament empirically. We find that the introduction of disclosure rules is usually not accompanied by a significant shift in the proportion of lawyers and businesspeople in parliament (direct effect). In general, we did not find significant effects on rent-seeking and trust and, when we did, individual disclosure rules were correlated with worse, rather than better, governance quality. However, individual disclosure rules do seem to curb government deficits, at least marginally (indirect effects).

Keywords: Political Financing, Money in Politics, Transparency and Disclosure, Socioeconomic composition of Parliament, Individual Disclosure Rules, Legislative Codes of Conduct

JEL Classification: D02, D72, K19, K49, Z13