As part of an anti-corruption campaign, the Brazilian government began
to audit the municipal expenditure of federally-transferred funds. Using
these audit reports, a unique data set of political corruption was
constructed to test whether re-election affects the level of corruption
in a municipality. Consistent with a political economy agency model, it
was found that mayors who are in their second and final term are
significantly more corrupt than first term mayors. In particular, second
term mayors on average divert R$ 188,431 more than first term mayors,
which is approximately 4 percent of the total amount transferred to
municipalities. There is also much more pronounced effect among
municipalities where the costs of rent-extraction are lower, and density
of pivotal voters is higher. The results also illustrate an important
trade-off: second term mayor, while more corrupt, provides a higher
level of public goods. As Brazil and other countries continue their
decentralization process, these findings promote the need for a better
understanding of how local institutions can help reduce the incentives
for corruption.
Internet: <http://are.berkeley.edu/~ferraz/corruption_01_26_05.pdf> (with adaptations).
According to the text above, it can be concluded that"to audit" means to examine thoroughly.
Certo
Errado