Grease in the Wheel: Corruption and firms


Published 01.02.18

Emanuele Colonnelli investigates how randomised audits on government procurement contracts in Brazil affect the real economy and firm behaviour.

Emanuele Colonnelli's findings reveal that in the five years after the government anti-corruption audits were conducted, the performance of the government-dependent sector improved, and financial institutions were more willing to lend to local firms. This is on account of corruption being detrimental to firm performance and economic growth, by acting as an extra tax on firms, thereby adding to their costs of doing business. Consequently, small and medium firms benefit most from audits, rendering them allies in the fight against corruption.

Editors’ note: The research discussed in this video stems from this PEDL project