Fabrício Henrique Silvestre

The purpose of this research is to verify the effect of social observatories on corruption. This relationship is given by the environment that the social observatory is inserted in and the decisions of the politicians who are in the executive power. In order to carry out the empirical analysis, objective measures of corruption are used, which are built based on data from the audit reports of the General Comptroller of the Union (CGU) on the federal resources transferred to the municipalities during the 2008 to 2016 administrations. We analyzed the role of the social observatory on transparency under the framework of the political model of agency considering the hypothesis of incomplete information. The results found indicate that the social observatory helps the process of fighting corruption. Using various controls, it appears that in the municipalities where there is a social observatory, corruption has been shown to be less under different indicators and empirical specifications. Thus, the results suggest that a policy to stimulate the foundation of social observatories should be considered by the public manager given its effectiveness in combating corruption.