Transparency and local government corruption: What does lack of transparency hide?

Abstract

This paper empirically investigates the causal relationship between local government transparency and political corruption in a sample of Spain's 110 largest municipalities. After implementing a two-stage probit estimation procedure, our evidence indicates that transparency is inversely related to the likelihood of local political corruption. This result supports the hypothesis that a lack of transparency conceals corrupt activities and that an unwillingness to provide information is a good proxy of the likelihood of corruption.