Fifteenth International Conference on Interdisciplinary Social Sciences

Abstract

From empirical literature, trust is related to cause and consequence of corruption. Based on data from the 2012 and 2016 America Barometer studies, this article empirically explores the relationship linking trust and corruption in Brazil, Mexico, and selected countries. This study also analyzes the effect of the biggest anti-corruption and money laundry investigation in Latin America, called Operation Car Wash, on those variables. From America Barometer surveys of around 22,579 citizens, in 2016 corruption appeared for the first time as the main concern for Brazil and corruption was ranked as the third most critical problem in Mexico. Because the potential endogenous relationship between trust and corruption may violate the assumptions of ordinary least squares (OLS), simultaneous equations model (SEM) accounting for missing values and instrumental variables are employed here. First, this study analyzes the mutual causality between citizens’ experience with corruption and their trust in the local government and what factors explain this hypothesized relationship. Second, this paper presents a multigroup analysis in order to assess the impact of Operation Car Wash on the model. The main contribution of this paper is to use structural equation modeling on recent data to investigate the relationship between corruption and trust and to assess the effect of the biggest Brazilian investigation against money-laundering and corruption (named Car-wash Operation) on those variables. Results suggest no evidence of a simultaneous relationship between corruption experience and trust in local government. Also, the is no evidence that Operation Car Was significantly impacted by the model.