Federal and state audits do not increase compliance with a grant program to improve municipal infrastructure: A pre-registered field experiment Articles uri icon

publication date

  • May 2023

start page

  • 1

end page

  • 20

volume

  • 162, 103043

International Standard Serial Number (ISSN)

  • 0304-3878

Electronic International Standard Serial Number (EISSN)

  • 1872-6089

abstract

  • Government audits usually have a broad mandate to monitor compliance with program rules. We conducted
    a field experiment in collaboration with Mexico’s Superior Auditor of the Federation to investigate if federal
    or state audits increase municipal compliance with the allocation, reporting, and transparency rules of an
    intergovernmental grant to improve local infrastructure. We randomly assigned 85 municipalities to be audited
    by a federal auditor, a state one, or a control group. We find that audits do not increase compliance
    and examine the reasons behind this null effect. Drawing from audit reports and a survey of municipal
    administrators, we show that, even though audits produced verifiable information and increased expectations
    of future audits, their effect on administrators’ perceived career prospects was limited. We conclude with a
    discussion of the policy implications of our results

subjects

  • Sociology

keywords

  • oversight; inter-governmental programs; public goods; decentralization; accountability