Unintended Consequences of Anti-Corruption Strategies

46 Pages Posted: 9 Aug 2021 Last revised: 8 Mar 2022

See all articles by Elías Cisneros

Elías Cisneros

University of Göttingen ; University of Texas at Austin - Department of Geography and the Environment

Krisztina Kis-Katos

University of Goettingen (Göttingen)

Date Written: March 07, 2022

Abstract

Fighting corruption in one sector may improve overall governance but may also shift rent extraction activities to less scrutinized sectors. This paper highlights such unintended consequences of a federal anti-corruption strategy in Brazil by documenting the causal effects of randomized fiscal audits on deforestation dynamics, a non-targeted outcome. Between 2003 and 2011, public audits of federal funds increased deforestation by about 10% in municipalities of the Brazilian Amazon within the first three years after the audit. Municipalities seem also to have learned from neighboring audits, which affected deforestation outcomes in a similar way to own audits. The audit effects doubled among first-term mayors who managed to win re-elections afterward, suggesting the potential presence of electoral benefits to such strategies.

Keywords: Deforestation, corruption, fiscal audits, Brazil, Amazonas

JEL Classification: D73, O13, Q23

Suggested Citation

Cisneros, Elías and Kis-Katos, Krisztina, Unintended Consequences of Anti-Corruption Strategies (March 07, 2022). Available at SSRN: https://ssrn.com/abstract=3899498 or http://dx.doi.org/10.2139/ssrn.3899498

Elías Cisneros (Contact Author)

University of Göttingen ( email )

Platz der Goettinger Sieben 3
Goettingen, 37073
Germany

University of Texas at Austin - Department of Geography and the Environment ( email )

305 E. 23rd Street, A3100
RLP 3.306
Austin, TX 78712
United States

Krisztina Kis-Katos

University of Goettingen (Göttingen) ( email )

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