The Power of Example - Corruption Spurs Corruption

Does political corruption erode civic values and foster dishonest behaviour? I test this hypothesis in the context of Mexico, by combining data on local government corruption and cheating in school tests. I find that,... [ view full abstract ]

Does political corruption erode civic values and foster dishonest behaviour? I test this hypothesis in the context of Mexico, by combining data on local government corruption and cheating in school tests. I find that, following revelations of corruption by local officials, cheating in cognitive tests by secondary school students increases significantly. The effect is large and robust, it persists for over one year after malfeasance is revealed, and is more pronounced for older students, arguably more exposed to political discussions within and outside the family. Furthermore, it is stronger in places where the incumbent party was thought to be honest, and corruption revelations have come as a surprise. Consistent with this, the effect is greater if a municipality is revealed as corrupt for the first time. These findings are validated by evidence from individual survey data which document that individuals interviewed right after corruption is revealed report to be less honest, less trustworthy and more prone to think that cheating is necessary to succeed, than similar individuals interviewed just before.