Monitoring and Delviering: Evidence from Dropout Rates in Brazil

Abstract

This paper provides evidence that randomized audits in Brazil led to an improvement in some outcomes for public school students, but were relatively ineffective in improving the provision of other public services. I find causal evidence that the audits led to a decrease in the dropout rates in municipal elementary and middle schools by 0.37 percentage points, which corresponds to a ten percent decrease. A back-of-the-envelope calculation suggests that one fewer student dropped out, per school, per two years, as a result of these municipal audits. This amounts to approximately one third of the estimates of the decrease in dropout rates resulting from \textit{Bolsa Família}, a large conditional cash transfer program in Brazil. I also find suggestive evidence that this effect is driven by the audits disciplining audited mayors. Additionally, I show that the effectiveness of the audits in decreasing dropout rates is dependent on a municipality’s reliance on conditional cash transfers, and on the amount of irregularities uncovered during the audit. These results support the notion that monitoring can effectively realign the incentives of politicians and their constituencies.

Bruno Kömel

Ph.D. Student in Economics

I am a Ph.D. student (3rd year) at the Department of Economics at the University of Pittsburgh. My interests are in development economics, public economics, and political economy, especially as it pertains to institutions, the provision of public goods, and agriculture.