Using a novel dataset of corruption in education and schooling outcomes across public schools in Brazil, we find that student test scores on a national standardized exam are 0.35 standard deviations lower in municipalities where corruption was detected. We also find that corruption is associated with higher dropout and failure rates.
That is from a paper by Ferraz, Finan, and Moreira (October 2012, Journal of Public Economics). A 2009 draft is here. The title is "Corrupting Learning: Evidence from Missing Federal Education Funds in Brazil."
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