Motivating Politicians: The Impacts of Monetary Incentives on Quality and Performance

Recent studies have emphasized the importance of the quality of politicians for good government and consequently economic performance. But if the quality of leadership matters, then understanding what motivates individuals to become politicians and perform competently in office becomes a central question. In this paper, we examine whether higher wages attract better quality politicians and improve political performance using exogenous variation in the salaries’ of local legislators across Brazil’s municipal governments. The analysis exploits discontinuities in wages across municipalities induced by a constitutional amendment defining caps on the salary of local legislatures according to municipal population. Our main findings show that increases in salaries not only attracts more candidates, but more educated ones. Elected officials are in turn more educated and stay in office longer. Higher salaries also increase legislative productivity as measured by the number of bills submitted and approved, and the provision of public goods.politician salary, quality, political agency

Reelection Incentives and Political Corruption: Evidence from Brazilian Audit Reports

As part of a recent anti-corruption campaign, the Brazilian government began to audit the municipal expenditure of federally-transferred funds. Using these audit reports, we construct a unique data set of political corruption to test whether reelection incentives affect the level of corruption in a municipality. Consistent with a political economy agency model, we find 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$188,431.4 more than first-term mayors, which is approximately 4 percent of the total amount transferred to municipalities. We also find much more pronounced effects among municipalities where the costs of rent-extraction are lower, and the density of pivotal voters is higher. Our results also illustrate an important trade-off: second-term mayors, while more corrupt, provide a higher level of public goods. As Brazil and other countries continue their decentralization process, our findings promote the need for a better understanding of how local institutions can help reduce the incentives for corruption.Political Economy,

Vote-Buying and Reciprocity

While vote-buying is common, little is known about how politicians determine who to target. We argue that vote-buying can be sustained by an internalized norm of reciprocity. Receiving money engenders feelings of obligation. Combining survey data on vote-buying with an experiment-based measure of reciprocity, we show that politicians target reciprocal individuals. Overall, our findings highlight the importance of social preferences in determining political behavior.vote-buying, reciprocity, redistributive politics, voting, social preferences

Brokering Votes With Information Spread Via Social Networks

Throughout much of the developing world, politicians rely on political brokers to buy votes prior to elections. We investigate how social networks help facilitate vote-buying exchanges by combining village network data of brokers and voters with broker reports of vote buying. We show that networks diffuse politically-relevant information about voters to brokers who leverage it to target voters. In particular, we find that brokers target reciprocal voters who are not registered to their party and about whom they can hear more information through their social network. These results highlight the importance of information diffusion through social networks for vote buying and ultimately for political outcomes

MEASURING THE INCOME GENERATING POTENTIAL OF LAND IN RURAL MEXICO

This paper measures the potential of land to generate income and establishes the contexts under which access to land can reduce poverty. Using Mexican household data, we apply nonparametric regression methods to estimate and graphically explore the relationship between land and welfare. Results suggest that the marginal value of land depends on both the complementary and contextual assets of the poor.Land Economics/Use,

Corrupting Learning: Evidence from Missing Federal Education Funds in Brazil

While cross-country analysis suggests that corruption hinders economic growth, we have little evidence on the mechanisms that link corruption to long-run economic development. We provide micro-evidence on the consequences of corruption for the quality of education. 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 students’, schools’ and municipal characteristics, we find that corruption significantly reduces 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. We also provide evidence on the mechanisms that link corruption and mismanagement to learning and school attainment. The results are consistent with corruption directly affecting economic growth through the reduction of human capital accumulation. JEL Codes: D73, I21, H72

Local Electoral Incentives and Decentralized Program Performance

This paper analyzes how electoral incentives affected the performance of a major decentralized conditional cash transfer program intended on reducing school dropout rates among children of poor households in Brazil. We show that while this federal program successfully reduced school dropout by 8 percentage points, the program's impact was 36 percent larger in municipalities governed by mayors who faced reelection possibilities compared to those with lame-duck mayors. First term mayors with good program performance were much more likely to get re-elected. These mayors adopted program implementation practices that were not only more transparent but also associated with better program outcomes.decentralization, electoral incentives, conditional cash transfer, impact evaluation

Electoral Accountability and Corruption: Evidence from the Audits of Local Governments

Political institutions can affect corruption. We use audit reports from an anti-corruption program 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 re-election incentives misappropriate 27 percent fewer resources than mayors without re-election 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.

Motivating Politicians: The Impacts of Monetary Incentives on Quality and Performance

Recent studies have emphasized the importance of the quality of politicians for good government and consequently economic performance. But if the quality of leadership matters, then understanding what motivates individuals to become politicians and perform competently in office becomes a central question. In this paper, we examine whether higher wages attract better quality politicians and improve political performance using exogenous variation in the salaries of local legislators across Brazil’s municipal governments. The analysis exploits discontinuities in wages across municipalities induced by a constitutional amendment defining caps on the salary of local legislatures according to municipal population. Our main findings show that higher wages increases political competition and improves the quality of legislators, as measured by education, type of previous profession, and political experience in office. In addition to this positive selection, we find that wages also affect politicians’ performance, which is consistent with a behavioral response to a higher value of holding office.