When electoral reforms backfire: reassessing reelection’s impact on corruption

This article evaluates the effect of prohibiting immediate reelection of subnational authorities in Peru on incentives for engaging in corruption through public procurement and investment expenditure. Using quantitative indicators derived from public contracting and investment expenditure data and applying interrupted time series models with fixed effects. Additionally, we conduct a placebo test, and sensitivity analysis across different reform timings, the study finds evidence suggesting that the reelection ban increased corruption risks at the subnational level. Specifically, the results show an increase in the percentage of projects with cost overruns and the proportion of expenditures executed through contracts below the supervision threshold of the State Contracting Supervisory Body (OSCE). These findings support predictions from the electoral accountability model, which argues that the possibility of reelection incentivizes politicians to align their preferences with those of citizens and refrain from rentseeking behavior. Overall, this study highlights the importance of considering not only electoral incentives in designing anti-corruption policies but also broader institutional and organizational reforms.