The economics of fraud and corruption
Name
1191625520-MIT.pdf
Size
3.65 MB
Format
Adobe PDF
Checksum (MD5)
510d9efa6611654a7c5c5e50632d751a
Author(s)
Leder-Luis, Jetson.
Advisor(s)
James Poterba and Benjamin Olken.
Date Issued
2020
Publisher
Massachusetts Institute of Technology
Abstract
Fraud and corruption are serious issues which undermine the provision of public goods. This thesis consists of three papers which analyze the economics of fraud and the mechanisms by which it can be detected and averted. An introductory chapter presents an overview of the economic ideas surrounding these topics. In the αrst paper, I analyze a US federal law that incentivizes whistleblowers to litigate against fraud and misreporting committed against the Medicare program. I provide a theoretical framework for understanding the economic tradeoffs associated with privatized whistleblowing enforcement and then empirically analyze the deterrence effects of whistleblower lawsuits. In the second paper, conducted as joint research, we consider the incentives for misreported enrollment statistics in Israeli public school data and the way in which data manipulation undermines economic estimates of the returns to smaller class sizes. We provide evidence of enrollment manipulation and show that smaller class sizes have no effect on student achievement, overturning earlier literature. In the third paper, we develop a mechanism for detecting misreported αnancial data and apply it to reports from a World Bank project. Our results are consistent with strategic and proαtable falsiαcation of data, and our method matches the results of an audit conducted independently by the World Bank on the same project.
Description
Thesis: Ph. D., Massachusetts Institute of Technology, Department of Economics, May, 2020
Cataloged from the official PDF of thesis.
Includes bibliographical references.
Subjects
Economics.
MIT Department
Massachusetts Institute of Technology. Department of Economics
Terms of Use
MIT theses may be protected by copyright. Please reuse MIT thesis content according to the MIT Libraries Permissions Policy, which is available through the URL provided.
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