Government Audits / Martina Cuneo, Jetson Leder-Luis, Silvia Vannutelli.

Format:

Book

Author/Creator:

Cuneo, Martina.

Contributor:

National Bureau of Economic Research.

Leder-Luis, Jetson.

Vannutelli, Silvia.

Series:

Working Paper Series (National Bureau of Economic Research) no. w30975.

NBER working paper series no. w30975

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2023.

Summary:

Audits are a common mechanism used by governments to monitor public spending. In this paper, we discuss the effectiveness of auditing with theory and empirics. In our model, the value of audits depends on both the underlying presence of abuse and the government's ability to observe it and enforce punishments, making auditing most effective in middling state-capacity environments. Consistent with this theory, we survey all the existing credibly causal studies and show that government audits seem to have positive effects mostly in middle-state-capacity environments like Brazil. We present new empirical evidence from American city governments, a high-capacity and low-impropriety environment. Using a previously unexplored threshold in federal audit rules and a dynamic regression discontinuity framework, we estimate the effects of these audits on American city finance and find no marginal effect of audits.

Notes:

Print version record

February 2023.