Plata Y Plomo: How Higher Wages Expose Politicians to Criminal Violence

85 Pages Posted: 21 Aug 2023

See all articles by Massimo Pulejo

Massimo Pulejo

University of Milan and CLEAN

Pablo Querubin

New York University (NYU) - Department of Politics

Date Written: August 2023

Abstract

Adequate wages are an important tool to shield public officials from special interests and corruption. But what is the equilibrium effect of higher wages in the presence of criminal pressure groups, who use both bribes and violence? By means of a regression discontinuity design, we show that an increase in the remuneration of Italian municipal cabinets triggers a sizable and significant increase in criminal attacks against their members. We argue that this is triggered by higher-paid officials' lower likelihood of catering to criminal interests. In particular, we show that better-paid politicians are significantly more likely to prevent corruption in public procurement, a key area of illicit interactions between the state and criminal organizations. Additional analyses reveal that the disciplining effect of wages is driven by a change in incumbents' behavior rather than improved selection. These findings reveal how -- in the presence of criminal groups -- higher wages may limit corruption, but also foster the use of violence as an alternative tool to influence policymaking.

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Suggested Citation

Pulejo, Massimo and Querubin, Pablo, Plata Y Plomo: How Higher Wages Expose Politicians to Criminal Violence (August 2023). NBER Working Paper No. w31586, Available at SSRN: https://ssrn.com/abstract=4546459

Massimo Pulejo (Contact Author)

University of Milan and CLEAN ( email )

Via Festa del Perdono, 7
Milan
Italy

Pablo Querubin

New York University (NYU) - Department of Politics ( email )

New York, NY
United States

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