How to Reduce Corruption in Brazilian Municipalities


Ciro Biderman e George Avelino



Article in focus: Governance in managing public health resources in Brazilian municipalities
Corruption has been viewed as a significant threat to the operation of health services. According to previous studies, the misappropriation of public funds compromises a government’s ability to supply basic services, such as immunization, or to reach universal targets, such as a reduction in infant mortality. This sector is sensitive to corrupt practices because of the large amounts of money involved, the complexity of the involved entities (e.g., users, hospitals, pharmaceutical companies, health plans and service providers) and the information asymmetry among these various agents.

In “Governance in managing public health resources in Brazilian municipalities”, which appeared in the Health Policy and Planning journal, FGV-EAESP researchers George Avelino, Lorena Barberia and Ciro Biderman argue that better local governance in the health area could help reduce rates of corruption at the municipal level in Brazil.

Avelino, Barberia and Biderman conducted a quantitative study on the data from municipality audits by the Office of the Federal Controller General (CGU) and information on the Municipal Health Councils, which is a new obligatory institution for municipalities that receive intergovernmental funding. Of the 980 analyzed municipalities, 881 had established a Health Council before or during the year of the audit. The average time of operation of these councils was 11 years.

The authors found that the municipalities with the oldest councils had a lower incidence of corruption than those with younger councils (or no council). Each year of experience with a council was associated with a reduction in the corruption index of 0.4 percentage points. “We consider this impact to be relatively high, given that the average percentage of the corruption index is 19%. Using this proportion as a basis, this means that in a municipality with a 19% incidence of corruption, the presence of a health council would result in a decline in this indicator to 15% over a period of ten years, or a reduction of 21%”, state the researchers.

The study’s results also suggest that the misappropriation of public funds is more likely to occur in municipalities whose budgets depend on intergovernmental funding. However, given the effect of the council’s governance, the decentralization of expenditure does not significantly affect corruption levels. “The imbalance between spheres of government can increase corruption in health, but the good news is that those municipalities with more experienced health councils are capable of compensating for this gap,” state Avelino, Barberia and Biderman.

The authors believe that whereas federal audits are an important centrally directed anticorruption tool, “efficient supplementary local supervision is fundamental for making municipal employees accountable and for reducing corruption”.
Contact the author Ciro Biderman.
Learn more abour the research conducted by Ciro Biderman.