Accountability and corruption displacement: evidence from Italy

Abstract One of the reasons for which corruption is so difficult to eradicate is because the actors involved are skilled in adapting their behaviour to changing institutional landscapes. However, surprisingly little is known about how corruption displacement functions across multiple levels of government. Using novel multilevel data on a political scandal in Italy and a Difference-in-Differences estimation strategy, I provide within-country evidence that a sudden increase in accountability for national deputies can impact negatively upon the behaviour of local-level public officials and politicians. In treated districts, where there is an increase in the indictment rate of national deputies, local-level corruption increases significantly as compared to nontreated districts. My results show how, in contexts characterised by systemic corruption, changes intended to enhance accountability can trigger a series of mechanisms within the political machine that exploit different levels of government.