Despite long-standing scholarly interests in anti-corruption initiatives in developing countries, existing literature has predominantly featured policy evaluations of specific techniques. This research unpacks wider consequences of efforts to fight corruption on bureaucracy and state capacity. I argue that efforts that are effective in producing visible results in corruption reduction may have the unintended consequences of reducing bureaucrats' productivity and eroding state capacity. The fear of potentially implicating themselves could incentivize bureaucrats to deliver less output. I test this theory using original datasets of anti-corruption inspection tours and novel measures of goal implementation. My results document that efforts to fight corruption substantially decrease productivity of bureaucrats and state capacity, variously measured. Subsequent analysis suggests that the reduction in productivity is not through reduction in actual corruption, but in large part via a chilling effect on bureaucrats who are less corrupt.
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