Combating Political Corruption with Policy Bundles

64 Pages Posted: 26 Apr 2021 Last revised: 16 Nov 2022

See all articles by Frederico Finan

Frederico Finan

University of California, Berkeley - Department of Economics; IZA Institute of Labor Economics

Maurizio Mazzocco

University of California, Los Angeles (UCLA)

Date Written: April 2021

Abstract

In this paper, we develop a dynamic model of politicians who can engage in corruption. The model offers important insights into what determines corruption and how to design policy to combat it. We estimate the model using data from Brazil to measure voters' willingness to pay for various commonly-proposed anti-corruption policies, such as increasing audit probabilities, increasing politicians' wages, and extending term limits. We document that while voters have a high willingness to pay for audit policies, due to their effectiveness in reducing corruption, a multi-pronged approach that bundles certain policies can achieve similar welfare gains at a fraction of the cost.

Suggested Citation

Finan, Frederico and Mazzocco, Maurizio, Combating Political Corruption with Policy Bundles (April 2021). NBER Working Paper No. w28683, Available at SSRN: https://ssrn.com/abstract=3834138

Frederico Finan (Contact Author)

University of California, Berkeley - Department of Economics ( email )

310 Barrows Hall
Berkeley, CA 94720
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Maurizio Mazzocco

University of California, Los Angeles (UCLA) ( email )

405 Hilgard Avenue
Box 951361
Los Angeles, CA 90095
United States

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