Jurisdiction size and perceived corruption

Abstract

This paper studies the relationship between the size of a jurisdiction and how corrupt its citizens perceive officials to be. The relationship may a priori be driven by four distinct mechanisms: (i) larger communities have more officials, thereby making it more likely at least one official is corrupt; (ii) larger communities have a larger budget, thereby offering more opportunity for corruption; (iii) monitoring officials is costlier in larger communities; and (iv) the public is less likely to have contact with officials in larger communities, which raises citizens’ suspicion. First, using cross-country analysis, we establish that people perceive more corruption in countries with larger populations. We then test this stylized fact using French survey data on the perception of municipal government corruption. We again observe that the perception of corruption increases with population size. This result is robust to a series of checks and many confounding factors. Moreover, our results hold across two distinct periods and for another administrative unit, departments. Finally, we report suggestive evidence that the stylized fact is driven by mechanisms (i) and (ii), but not by (iii) and (iv).