Abstract:

We exploit an anti-corruption program to investigate the effects of municipal level audition reported wrongdoing. We show that reported wrongdoings increase immediately after an audit announcement. The probability of ling at least one complaint peaks in the month of the announcement and is 3 - 4 times larger than the mean of the pre-audit mean. The effect decays in the months that follow and is not statistically different from zero the year after the announcement. The effect is stronger in areas with less social capital and higher corruption. We argue that audits improve whistleblower protection against retaliation and increase the likelihood of being heard. These findings have important policy implications and contribute to the growing literature on whistleblowers' motivations and the effects of audits.

By invitation: for information or to receive the invitation link contact chiara.fiaccadori@unibocconi.it