The Watchful Eye and the Cracking Whip: A Field Experiment on Corruption Monitoring in Mexico

Investigator: CDEP Affiliate Paul Lagunes

Oversight will only strengthen accountability if wrongdoers face the risk of punishment. In this study on corruption in urban development, Paul Lagunes randomly selected building permits to enter into a treatment group. Officials were aware that an external auditor was carefully reviewing all the documentation for building permits within this group. Simultaneously, they were unaware that the auditor was reviewing another set of randomly selected permits. Lagunes's study shows that the additional oversight raises officials' diligence and stringency in a statistically significant manner, but only when such efforts are explicitly supported by a government’s leadership. The watchful eye is, thus, in need of a cracking whip.

This project is part of CDEP's Politics, Institutions and Conflict Initiative.