"Audits for Accountability: Evidence from Municipal By-Elections in South Africa"

Seminar with Dr. Daniel Berliner

Assistant Professor of Political Science and Public Policy, London School of Economics

Do voters punish corrupt politicians and reward “clean” ones? Many theories of electoral accountability assume that voters will retrospectively reward or punish politicians for performance in office, particularly corruption. Empirical evidence to support this assumption, however, has been decidedly mixed. We expand this research to a new context, focusing on the impact of audit information on electoral performance in South African municipalities. Each year, the national audit body releases a report on municipal financial management audits. Despite substantial attention to improving outcomes, few municipal governments obtain clean audits and improvement over time has been limited. We assess the impact of this information by employing a novel identification strategy comparing by-elections taking place before and after audit results are announced each year. Preliminary results suggest that the locally-governing party is rewarded where audit outcomes have improved, and punished where they have worsened – but only following the publication of timely and attributable audit information. This is especially the case where local councils are more competitive, thus raising the stakes of by-election outcomes for local control. We find no effect of the levels, rather than the changes, in audit outcomes, suggesting voters do not respond to information that merely confirms the status quo.