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Working paper 687

Gustavo J. Bobonis, Luis Raúl Cámara Fuertes, Harold J. Toro, Julie Wilson, "Development and Decay: Political Organization, Economic Conditions, and Municipal Corruption in Puerto Rico, 1952-2015", 2021-01-22
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Abstract: Corruption has been a salient feature of Puerto Rico (PR)’s modern history. However, systematic empirical research on this subject has been generally lacking. In this paper, we examine trends and patterns in municipal government malfeasance and corruption during a period spanning over six decades. Using data from all municipal audit reports conducted by the PR Office of the Comptroller between 1952 through 2015, we characterize patterns of corruption across three periods of change that altered governance practices in the territory: the time of hegemonic dominance of the Partido Popular Democrático (PPD), the era of intense political competition between the PPD and the pro-statehood Partido Nuevo Progresista (PNP), and the final collapse of the territory’s institutional model. We show that institutions and political practices, as opposed to economic determinants, play a key role in explaining corruption patterns. We argue that corruption patterns can be explained through the lens of politics in divided and polarized societies.

Keywords: corruption; clientelist politics; anti-corruption audits; accountability; political polarization; divided societies

JEL Classification: D72, D74, J15, O17