Abstract
The article analyzes how local corruption affects health indicators. Using a random sample of audited Brazilian municipal governments, an objective indicator of corruption was constructed and utilized as an explanatory variable for health indicators involving different dimensions of performance. Using instrumental variables and a series of controls to assure robustness of the results, a causal relationship was found between corruption and the performance of public services, confirming a chain reaction. The study confirms that additional resources are necessary, but not sufficient, to guarantee improvements in the performance of local government services in Brazil.
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