The Impact of Mayors’ Corruption on Spanish Municipal Spending
El impacto de la corrupción de los alcaldes en el gasto municipal español
Abstract
We investigate the impact of mayors’ corruption on the size and structure of Spanish municipal budgets. The theory posits that total expenditure is greater in corrupt governments: €77.08 higher per capita in our sample when a corrupt mayor is in office. Moreover, the literature predicts that mayors (agents), will spend more on items directly connected with corruption, rather than expenditure priorities demanded by the citizens (principals). Thus, we show that total expenditure, capital, trash collection and police are higher when corruption exists. Literature predicts that corrupt mayors spend less on items that provide fewer opportunities to collect bribes: our data show that corrupt mayors do not spend more on health. Corrupt mayors spend on average 1.46 years on duty after being taken to court with a formal indictment on a corruption charge. This indicates that in Spain, sadly, resigning the mayoralty is not automatic when facing criminal charges for corruption.
Downloads
-
Abstract1967
-
PDF958
-
HTML185
References
Artés, J., Jiménez, J. L., & Perdiguero, J. (2015). The effects of revealed corruption on local finances. Universidad Complutense. Mimeo.
Bågenholm, A. (2013). Throwing the rascals out? The electoral effects of corruption allegations and corruption scandals in Europe 1981-2011. Crime, Law and Social Change, 60(5), 595-609. https://doi.org/10.1007/s10611-013-9482-6
Benito, B., Brusca, I., & Montesinos, V. (2003). Utilidad de la información contable pública en los rating de deuda pública. Spanish Journal of Finance and Accounting-Revista Española de Financiación y Contabilidad, 117, 501-537. https://doi.org/10.1080/02102412.2003.10779494
Benito, B. (2016). Accountability and Corruption, Europe. In A. Farazmand (Ed.), Global Encyclopedia of Public Administration, Public Policy, and Governance. Cham, Switzerland: Springer. https://doi.org/10.1007/978-3-319-31816-5_2291-1
Benito, B., Guillamón, M. D., Ríos, A. M. & Bastida, F. (2018). Can salaries and re-election prevent political corruption? An empirical evidence. Revista de Contabilidad-Spanish Accounting Review, 21(1), 19-27. https://doi.org/10.1016/j.rcsar.2017.04.003
Benito, B., Bastida, F., & Guillamón, M. D. (2010). Urban Sprawl and the Cost of Public Services: An Evaluation of Spanish Local Governments. Lex Localis - Journal of Local Self-Government, 8(3), 245-264. https://doi.org/10.4335/8.3.245-264(2010)
Blundell, R., & Bond, S. (1998). Initial Conditions and Moment Restrictions in Dynamic Panel Data Models. Journal of Econometrics, 87(1), 115-143. https://doi.org/10.1016/S0304-4076(98)00009-8
Breitung, J. (2000). The local power of some unit root tests for panel data. In B. H. Baltagi (Ed.), Advances in Econometrics, Volume 15: Nonstationary Panels, Panel Cointegration, and Dynamic Panels (pp. 61-178). Amsterdam: JAI Press.
Chang, E. C., Golden, M., & Hill, S. (2010). Legislative malfeasance and political accountability. World Politics, 62(2), 177-220. https://doi.org/10.1017/S0043887110000031
De la Croix, D., & Delavallade, C. (2009). Growth, public investment and corruption with failing institutions. Economics of Governance, 10(3), 187-219. https://doi.org/10.1007/s10101-008-0057-4
Delavallade, C. (2006). Corruption and distribution of public spending in developing countries. Journal of Economics and Finance, 30(2), 222-239. https://doi.org/10.1007/BF02761488
Dezhbakhsh, H., Tohamy, S. M., & Aranson, P. H. (2003). A new approach for testing budgetary incrementalism. Journal of Politics, 65(2), 532-558. https://doi.org/10.1111/1468-2508.t01-3-00014
Drazen, A., & Eslava, M. (2010). Electoral manipulation via voter-friendly spending. Theory and evidence. Journal of Development Economics, 92(1), 39-52. https://doi.org/10.1016/j.jdeveco.2009.01.001
Fisman, R., & Gatti, R. (2002). Decentralization and corruption: evidence across countries. Journal of Public Economics, 83(3), 325-345. https://doi.org/10.1016/S0047-2727(00)00158-4
Glaeser, E. L., & Saks, R. E. (2006). Corruption in America. Journal of Public Economics, 90(6), 1053-1072. https://doi.org/10.1016/j.jpubeco.2005.08.007
Goel, R. K., & Nelson, M. A. (1998). Corruption and government size: A disaggregated analysis. Public Choice, 97(1-2), 107-120. https://doi.org/10.1023/A:1004900603583
Goel, R. K., & Nelson, M. A. (2011). Measures of corruption and determinants of US corruption. Economics of Governance, 12(2), 155-176. https://doi.org/10.1007/s10101-010-0091-x
Gong, T., & Zhou, N. (2015). Corruption and marketization: Formal and informal rules in Chinese public procurement. Regulation & Governance, 9(1), 63-76. https://doi.org/10.1111/rego.12054
Harris, R. D. F., & Tzavalis, E. (1999). Inference for unit roots in dynamic panels where the time dimension is fixed. Journal of Econometrics, 91(2), 201-226. https://doi.org/10.1016/S0304-4076(98)00076-1
Hessami, Z. (2014). Political corruption, public procurement, and budget composition: Theory and evidence from OECD countries. European Journal of Political Economy, 34, 372-389. https://doi.org/10.1016/j.ejpoleco.2014.02.005
Jain, AK. (Ed.) (2002). The political economy of corruption (Vol. 2). London, UK: Routledge.
Kenny, C. (2007). Construction, Corruption, and Developing Countries. Policy Research Working Paper no. 4271, World Bank. Available at https://openknowledge.worldbank.org/bitstream/handle/10986/7451/wps4271.pdf?sequence=1&isAllowed=y
La Porta, R., Lopez-de-Silanes, F., Shleifer, A., & Vishny, R. (1999). The quality of government. The Journal of Law, Economics, and Organization, 15(1), 222-279. https://doi.org/10.1093/jleo/15.1.222
Lancaster, TD., & Montinola, GR. (2001). Comparative political corruption: Issues of operationalization and measurement. Studies in Comparative International Development, 36(3), 3-28. https://doi.org/10.1007/BF02686202
Larmour, P., & Wolanin, N. (2013). Corruption and anti-corruption. ANU Press. http://doi.org/10.22459/CAC.03.2013
Levin, A., Lin, CF., & Chu, CSJ. (2002). Unit root tests in panel data: Asymptotic and finite-sample properties. Journal of Econometrics, 108(1), 1-24. https://doi.org/10.1016/S0304-4076(01)00098-7
Liu, C., & Mikesell, JL. (2014). The impact of public officials' corruption on the size and allocation of US state spending. Public Administration Review, 74(3), 346-359. https://www.jstor.org/stable/24027637
Liu, C., Moldogaziev, TT., & Mikesell, JL. (2017). Corruption and State and Local Government Debt Expansion. Public Administration Review, 77(5), 681-690. https://doi.org/10.1111/puar.12711
Lowery, D., & Berry, WD. (1983). The growth of government in the United States: An empirical assessment of competing explanations. American Journal of Political Science, 27(4), 665-694.
Mauro, P. (1995). Corruption and Growth. Quarterly Journal of Economics, 110(3), 681-712. https://doi.org/10.2307/2946696
Mauro, P. (1996). The Effects of Corruption on Growth, Investment, and Government Expenditure. IMF Working Paper No. 96/98. Available at SSRN: https://ssrn.com/abstract=882994t
Mauro, P. (1998). Corruption and the Composition of Government Expenditure. Journal of Public Economics, 69(2), 263-279. https://doi.org/10.1016/S0047-2727(98)00025-5
Montinola, GR., & Jackman, RW. (2002). Sources of corruption: A cross-country study. British Journal of Political Science, 32(1), 147-170. https://doi.org/10.1017/S0007123402000066
Rauch, JE. (1995). Bureaucracy, Infrastructure, and Economic Growth: Evidence from US Cities during the Progressive Era. American Economic Review, 85(4), 968-979.
Riera, P., Barberá, P., Gómez, R., Mayoral, JA., & Montero, JR. (2013). The electoral consequences of corruption scandals in Spain. Crime, Law and Social Change, 60(5), 515-534. https://doi.org/10.1007/s10611-013-9479-1
Ríos, A.M., Benito, B., & Bastida, F. (2017). Factors Explaining Public Participation in the Central Government Budget Process. Australian Journal of Public Administration, 76(1), 48-64. https://doi.org/10.1111/1467-8500.12197
Rogoff, K. (1990). Equilibrium political budget cycles. The American Economic Review, 80(1), 21-36.
Rose-Ackerman, S. (1999). Corruption and government: Causes, consequences, and reform. Cambridge, UK: Cambridge University Press. https://doi.org/10.1017/CBO9781139175098
Seligson, MA. (2002). The impact of corruption on regime legitimacy: A comparative study of four Latin American countries. Journal of Politics, 64(2), 408-433. https://doi.org/10.1111/1468-2508.00132
Shleifer, A., & Vishny, RW. (1993). Corruption. The Quarterly Journal of Economics, 108(3), 599-617. https://doi.org/10.2307/2118402
Tanzi, V. (1998). Corruption around the world: Causes, consequences, scope, and cures. IMF Staff Papers, 45(4), 559-594.
Tanzi, V., & Davoodi, HR. (1997). Corruption, Public Investment, and Growth. Working Paper no. 97/139, International Monetary Fund.
Tarschys, D. (1975). The growth of public expenditures: nine modes of explanation. Scandinavian Political Studies, 10(A10), 9-31. https://doi.org/10.1111/j.1467-9477.1975.tb00568.x
The World Bank (1997). Helping countries combat corruption: the role of the World Bank. Available at http://www1.worldbank.org/publicsector/anticorrupt/corruptn/corrptn.pdf.
Wagner, A., Schneider, F., & Halla M (2009). The Quality of Institutions and Satisfaction with Democracy in Western Europe-A Panel Analysis. European Journal of Political Economy, 25(1), 30-41. https://doi.org/10.1016/j.ejpoleco.2008.08.001
Werlin, HH. (2003). Poor nations, rich nations: A theory of governance. Public Administration Review 63(3), 329-342. https://doi.org/10.1111/1540-6210.00293
Wittman, D. (1989). Why democracies produce efficient results. Journal of Political Economy 97(6), 1395-1424. https://doi.org/10.1086/261660
Copyright (c) 2022 Revista de Contabilidad - Spanish Accounting Review
This work is licensed under a Creative Commons Attribution 4.0 International License.
The publications in this journal are subject to the following terms:
1. Ediciones de la Universidad de Murcia (EDITUM) and ASEPUC conserve the patrimonial rights (copyright) of the published manuscripts, and favour and allow their reuse under the licence of use indicated in point 2.
2. The manuscripts are published in the electronic edition of the journal under an Attribution-NonCommercial-NoDerivatives 4.0 International licence. It allows to copy, distribute and include the article in a collective work (for example, an anthology), as long as there is no commercial purpose, the article is not altered or modified and the original work is properly cited. This journal is free of charge for the Open Access publication. ASEPUC and EDITUM finance the productiona and publication costs of the manuscripts.
3. Conditions for self-archiving. Authors are permitted and encouraged to electronically disseminate the published version of their works, as it favors their circulation and dissemination and thus a possible increase in their citation and reach among the academic community.
