Who Is Punishing Corrupt Politicians – Voters or the Central Government? Evidence from the Brazilian Anti-Corruption Program

Abstract

Exploiting the exogenous variation of the release of the audit reports and the Brazilian institutional scheme, there is evidence that the central government reduces the amount of infrastructure transfers to municipalities with unveiled corrupt mayors after the release of the audit reports. Furthermore, the effects of the dissemination of corruption information on the probability of incumbent’s re-election seem to gradually disappear with time. Then, when corruption information is gone, voters punish corrupt politicians as a consequence of the reduction on transfers.