Political corruption is widespread across many developing countries and it is considered a major impediment to economic development. But we have limited evidence on the effectiveness of anti-corruption policies. This chapter summarizes the extent to which government audits of public resources reduces corruption in the context of Brazils anti-corruption program that randomly audits municipalities for their use of federal funds.

This paper documents the persistence of human capital over time and its association with long-term development. We exploit variation induced by a state-sponsored settlement policy that attracted immigrants with higher levels of schooling to particular regions of Brazil in the late nineteenth and early twentieth century. We show that one century after the policy, municipalities that received settlements had higher levels of schooling and higher income per capita. We provide evidence that long-run effects worked through higher supply of educational inputs and shifts in the structure of occupations toward skill-intensive sectors

This paper examines the effects of campaign spending limits on political competition and

incumbency advantage. We study a reform in Brazil that imposed limits on campaign spending

for mayoral elections. These limits were implemented with a discontinuous kink which we

exploit for causal identification. We find that stricter limits increase political competition by

creating a larger pool of candidates that is on average less wealthy. Moreover, we find that

stricter spending limits reduce the incumbency advantage, causing mayors to be less likely

to be reelected. These findings are consistent with a contest model with spending caps and

endogenous candidate entry

Political corruption is considered a major impediment to economic development, and yet it remains pervasive throughout the world. This paper examines the extent to which government audits of public resources can reduce corruption by enhancing political and judiciary accountability. We do so in the context of Brazil’s anti-corruption program, which randomly audits municipalities for their use of federal funds. We find that being audited in the past reduces future corruption by 8 percent, while also increasing the likelihood of experiencing a subsequent legal action by 20 percent. We interpret these reduced-form findings through a political agency model, which we structurally estimate. Based on our estimated model, the reduction in corruption comes mostly from the audits increasing the perceived threat of the non-electoral costs of engaging in corruption.

This paper examines the role of human capital persistence in explaining long-term

development. We exploit variation induced by a state-sponsored settlement policy

that attracted a pool of immigrants with higher levels of schooling to particular regions

of Brazil in the late 19th and early 20th century. We show that municipalities that

received settlements experienced increases in schooling that persisted over time. One

century after the policy, localities that received state-sponsored settlements had higher

levels of schooling and income per capita. We provide evidence that long-run effects

were driven by persistently higher supply and use of educational inputs and shifts in

the structure of occupations towards skill-intensive sectors

This paper tests whether demand shocks affect firm dynamics. We examine whether

firms that win government procurement contracts grow more compared to firms that

compete for these contracts but do not win. We assemble a comprehensive data set

combining matched employer-employee data for the universe of formal firms in Brazil

with the universe of federal government procurement contracts over the period of

2004 to 2010. Exploiting a quasi-experimental design, we find that winning at least

one contract in a given quarter increases firm growth by 2.2 percentage points over

that quarter, with 93% of the new hires coming from either unemployment or the informal

sector. These effects also persist well beyond the length of the contracts. Part

of this persistence comes from firms participating and wining more future auctions, as

well as penetrating other markets

O professor Claudio Ferraz aparece citado na matéria sobre criminalidade no Brasil no  Blog Americas View

This paper examines if money matters in education by looking at whether missing resources due to corruption affect student outcomes. We use data from the auditing of Brazil's local governments to construct objective measures of corruption involving educational block grants transferred from the central government to municipalities. Using variation in the incidence of corruption across municipalities and controlling for student, school, and municipal characteristics, we find a significant negative association between corruption and the school performance of primary school students. Students residing in municipalities where corruption in education was detected score 0.35 standard deviations less on standardized tests, and have significantly higher dropout and failure rates. Using a rich dataset of school infrastructure and teacher and principal questionnaires, we also find that school inputs such as computer labs, teaching supplies, and teacher training are reduced in the presence of corruption. Overall, our findings suggest that in environments where basic schooling resources are lacking, money does matter for student achievement.

We show that political institutions affect corruption levels. We use audit reports in Brazil to construct new measures of political corruption in local governments and test whether electoral accountability affects the corruption practices of incumbent politicians. We find significantly less corruption in municipalities where mayors can get reelected. Mayors with reelection incentives misappropriate 27 percent fewer resources than mayors without reelection incentives. These effects are more pronounced among municipalities with less access to information and where the likelihood of judicial punishment is lower. Overall our findings suggest that electoral rules that enhance political accountability play a crucial role in constraining politician's corrupt behavior

This paper uses publicly released audit reports to study the effects of disclosing information about corruption practices on electoral accountability. In 2003, as part of an anticorruption program, Brazil's federal government began to select municipalities at random to audit their expenditures of federally transferred funds. The findings of these audits were then made publicly available and disseminated to media sources. Using a data set on corruption constructed from the audit reports, we compare the electoral outcomes of municipalities audited before versus after the 2004 elections, with the same levels of reported corruption. We show that the release of the audit outcomes had a significant impact on incumbents' electoral performance, and that these effects were more pronounced in municipalities where local radio was present to divulge the information. Our findings highlight the value of having a more informed electorate and the role played by local media in enhancing political selection.