Human resources management as a tool to reduce corruption: Evidence from Mexico.

Abstract:

Most literature relies on the dominant principal-agent framework to emphasize how incentives, monitoring and sanctions are prime deterrents of corruption but stop short when evaluating how these general principles turn into concrete policies such as Human Resource Management (HRM). Following a call made at Public Administration to develop innovative research about how day-to-day management operations change incentives to be corrupt, we use a fine-grained data of 5.22 million USD audited to 544 Mexican local governments over a period of 3 years, to test the correlation between the misappropriation of public resources at subnational level and HRM functions. Our results suggest that HRM is a critical, underseen factor, to understand corruption. We find that having merit-based recruitment, internal control and evaluations, and less unequal structure of remunerations can help local governments to effectively prevent the misappropriation of public resources.

Last updated on 08/12/2019