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Monitoring Corruption: Evidence from a Field Experiment in Indonesia

This resource was published as Working Paper 11753 by the National Bureau of Economic Research as part of their Nber Working Paper Series.

This paper uses a randomized field experiment to examine several approaches to reducing corruption. It measures missing expenditures in over 600 village road projects in Indonesia by having engineers independently estimate the prices and quantities of all inputs used in each road, and then comparing these estimates to villages’ official expenditure reports. It finds that announcing an increased probability of a government audit, from a baseline of 4 percent to 100 percent, reduced missing expenditures by about 8 percentage points, more than enough to make these audits cost effective. By contrast, it finds that increasing grass-roots participation in the monitoring process only reduced missing wages, with no effect on missing materials expenditures. Since materials account for three-quarters of total expenditures, increasing grass-roots participation had little impact overall. The findings suggest that grass-roots monitoring may be subject to free-rider problems. Overall, the results suggest that traditional top-down monitoring can play an important role in reducing corruption, even in a highly corrupt environment.

Uploaded on: Nov 24, 2015
Last Updated: Dec 04, 2015
Year Published: 2007

Resource Tags

Resource Type: Impact Evidence Issues: Community Organizing, Governance, Accountability & Transparency Tool Type: Journal Articles & Books, Training Resources & Popular Education Method: Improving Governance, Accountability and Transparency, Promoting Citizens' Participation in Governance Languages: English Regions: Southeast Asia Nature of Impact: Change in institutional / government practice, Citizen Action & Participation, Legal Knowledge and Skills Institutions Engaged: NGOs, Regulatory / Implementing Agencies Evaluation Method: Randomized Control Trials, Surveys