We study how policies limiting the spending capacity of local governments may reduce corruption. We exploit the extension of one such policy, the Domestic Stability Pact (DSP), to small Italian municipalities. The DSP led to a decrease in both recorded corruption rates and corruption charges per...

The paper studies the long term impact of corruption on trust towards institutions. Previous studies have demonstrated that exposure to corruption may lower institutional trust in the short run. Whether those short term effects translate into a persistent effect is not known. We study the onset...

The paper studies the long term impact of corruption on trust towards institutions. Previous studies have demonstrated that exposure to corruption may lower institutional trust in the short run. Whether those short term effects translate into a persistent effect is not known. We study the onset...

In this paper, we study how policies limiting the spending capacity of local governments may lead to a reduction in corruption. We exploit the extension of one such policy, the Domestic Stability Pact (DSP), to Italian municipalities with less than 5,000 inhabitants that occurred in 2013. Using...

In this paper, we study how policies limiting the spending capacity of local governments may lead to a reduction in corruption. We exploit the extension of one such policy, the Domestic Stability Pact (DSP), to Italian municipalities with less than 5,000 inhabitants that occurred in 2013. Using...