It is believed that transparency and free access to information can root out corruption and malfeasance in government. This article finds that the introduction of asset disclosure rules for candidates for political office in India in November 2003 led to weeding out of ‘bad’ politicians by encouraging exit from politics and increasing the likelihood of incumbents being re-elected.
“Sunlight,” Justice Louis Brandeis famously wrote, “is said to be the best of disinfectants.” It’s an alluring notion – that transparency and free access to information will root out corruption and malfeasance in government.
One mechanism by which transparency can have a cleansing impact in democratic regimes is by giving voters the information they need to eject dishonest or incompetent politicians. This includes information on the politicians themselves – it should raise suspicions if a politician, earning an official salary of a few thousand dollars a year, is discovered to be living in a million dollar mansion and driving a Mercedes.
This type of reasoning has led governments worldwide to require asset disclosures of candidates for political office at various levels (Djankov et al. 2010). By compelling politicians to reveal their wealth at re-election time, the public can assess whether they profited from holding office, and allow journalists and civil society organisations to better dig into where their wealth came from. As the leading anti-corruption organisation – Transparency International – put it, asset disclosures “allow civil society to hold leaders to account” (Transparency International, 2013).
Impact of India’s asset disclosure rules for political candidates
In a recent study, my co-authors and I assess whether these high-minded ideas translated into genuine accountability amidst the hardball realities of Indian state-level politics (Fisman et al. 2017). Our analysis provides tentative support for the sunshine-as-disinfectant view of political accountability – exploiting the advent of asset disclosure rules in November 2003, we find that disclosures lead politicians to exit politics at higher rates. We also find that the incumbents that choose to stand for re-election are considerably more likely to be re-elected, consistent with disclosure requirements weeding out ‘bad’ politicians.
Studying the effects of electoral institutions is often
Based on this comparison, we find
Our analysis also points to this political ‘self-selection’ effect leading to better candidates, at least in the eyes of the public. Prior to the implementation of disclosure laws, Indian voters tended to throw out incumbents at very high rates – in fact, in contrast to the ‘incumbency advantage’ that is observed in the US and many other countries, India’s politicians faced a sharp incumbency disadvantage. But incumbents’ handicap at the polls shrank – by some measures becoming virtually non-existent – when disclosure laws were in place. That is, if disclosure rules were leading some incumbents to leave politics, voters seemed to prefer the ones that were left behind.
Role of citizen action
While our findings suggest that Indian voters have benefitted from the greater accountability as a result of politicians’ asset disclosures, it’s far too soon to tell what the longer-term consequences will be, or whether these findings can be expected to generalise to other settings. Most obviously, as politicians grow accustomed to disclosure requirements, they may simply grow more adept at hiding their wealth. As revealed in the Panama Papers – a dump of information on offshore accounts handled by Panamanian law firm Mosseck Fonseca – politicians worldwide
Or politicians may simply stop complying with disclosure requirements entirely. A collaboration between World Bank researchers and academics found that, while two-thirds of countries worldwide require politicians’ disclosures, in many cases they are not required to be made public, or the laws are ignored entirely. Accountability, therefore, requires more than just the use of disclosures by citizens in casting their ballots. Public pressure is necessary to force politicians to make disclosures in the first place.
This brings us back to the case of India. Politicians in Delhi did not demand their own
This article first appeared on VoxDev: https://voxdev.org/topic/institutions-political-economy/sunlight-disinfectant-disclosure-requirements-and-corruption-india
Batalha, João Paulo (2013), ‘Holding Politicians to Account: Asset Declarations’, Transparency International, 17 January.
Djankov, Simeon, Rafael La Porta, Florencio Lopez-de-Silanes and Andrei Shleifer (2010), "Disclosure by Politicians", American Economic Journal: Applied Economics,2(2): 179-209.
Fisman, R, F Schulz, and V Vig (2017), ‘Financial disclosure and political selection: Evidence from India’, Working Paper.