We estimate the causal real economic effects of a randomized anti-corruption crackdown on local governments in Brazil using rich micro-data on corruption and firms. After anti-corruption audits,
municipalities experience an increase in the number of firms concentrated in sectors most dependent on
government relationships and public procurement. Through the estimation of geographic spillovers and
additional tests, we show that audits operate via both a direct detection effect as well as through indirect
deterrence channels. Politically connected firms suffer after the audits. Our estimates indicate the anticorruption program generates significant local multipliers which are consistent with the presence of a large corruption tax on government-dependent firms.


  • Emanuele Colonnelli
  • Mounu Prem

Palabras clave:

  • Audits
  • Brazil
  • corruption
  • Development
  • firms
  • misallocation
  • political connections
  • public procurement


  • Proyecto 1
  • Publicación