Political incentives and corruption evidence from ghost students

We study the effect of links between politicians on corruption under prevailing clientelism. Connections between politicians increase fabricated "ghost" students to obtain more national transfers, without raising the quality or quantity of education. Bureaucratic turnover, temporary and discretionary hiring, electoral fraud, and complaints against functionaries also increase. Effects on ghosts are larger in municipalities with more clientelism, discretion over resource spending, and weaker oversight. The findings favor a venal view of corruption, where politicians divert resources for personal gain rather than to favor their constituencies. Nonetheless, they have better future career prospects, reflecting a failure of electoral control.

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