Political scandal is the abuse of entrusted power for private gain and can result in investigations, resignations, or even loss of office. These incidents impact public perception of government institutions and leaders, influencing trust and voter behavior and fostering skepticism about the political process. Scandals are widely reported in the media and have long-lasting consequences for the political landscape, eliciting reforms aimed at enhancing transparency and accountability.
Misbehavior by politicians may surprise voters but, in fact, it should not. The transformation of bad behavior into a scandal is politically motivated: partisans have incentives to expose the private actions of political opponents, even when they are based on flimsy evidence. Scandals exacerbate polarization, which stifles political discourse and encourages politicians to break rules for their own benefit.
The study of scandals is challenging, as the political behavior and responses to them are influenced by multiple factors and can be difficult to isolate. For instance, journalists have a clear incentive to report on scandals that concern their own party and often do so in a way that is biased. These biases can contaminate the study of political scandal and skew estimates of their impacts.
In this article, we study the political effects of a local scandal called Clean Hands in which a number of local politicians were implicated in bribery allegations. We use differences-in-differences to estimate the causal impact of this event on politicians, including those not directly involved in the scandal. We find that politicians in the implicated parties are more likely to strategically withdraw their support from the government, which can lead to an early parliamentary dissolution and increase the probability of political deadlock and crisis.
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