This paper uses a randomized field experiment to examine several approaches to reducing corruption. I measure 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. I find 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, I find 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.

This article presents an experiment in which 49 Indonesian villages were randomly assigned to choose development projects through either representative-based meetings or direct election-based plebiscites. Plebiscites resulted in dramatically higher satisfaction among villagers, increased knowledge about the project, greater perceived benefits, and higher reported willingness to contribute. Changing the political mechanism had much smaller effects on the actual projects selected, with some evidence that plebiscites resulted in projects chosen by women being located in poorer areas. The results suggest that direct participation in political decision making can substantially increase satisfaction and legitimacy. Recent years have witnessed a trend in the developing world toward local participation in government decision making (Stiglitz 2002; World Bank 2004). What this trend means in practice is that decisions about local public good provision are increasingly delegated to local assemblies, such as the Gram Panchayat in India and the Conselho do Orçamento

We assess, empirically and theoretically, the role of precolonial political institutions in shaping the performance of colonial and postcolonial African governments. Using anthropological data, we document a strong positive association between the provision of public goods such as education, health and infrastructure in African countries and the centralization of their ethnic groups’ precolonial institutions. We present historical evidence supporting a “local accountability” hypothesis whereby precolonial centralization improved public goods provision by making local chiefs more accountable. To empirically identify this effect, we build a model of the impact of “local accountability ” on public goods provision and test it against alternative hypotheses. Our results confirm the importance of the “local accountability ” view for fully explaining the impact of precolonial centralization on public goods in Africa.

Does fiscal decentralization lead to more efficient governance, better public goods, and higher economic growth? This paper tests hypotheses posed by theoretical literature that the results of decentralization depend on features of political institutions. Using data from up to 95 countries for 25 years, we show that the effect of decentralization on economic growth, quality of government, and public goods provision strongly depends on two aspects of political centralization: 1) strength of national party system (measured by the age of the main parties and fractionalization of the government parties) and 2) subordination (whether local and state executives are appointed or elected). We find solid support for Riker’s theory (1964) in developing countries: Strong parties significantly improve the results of fiscal decentralization in terms of economic growth, quality of government, and public goods provision. There is also some evidence that subordination of local to higher-level governments improves the effect of decentralization on growth and public goods provision (in developed and developing countries) and government quality (in developing countries).

Advocates of fiscal decentralization argue that amongst other benefits, it can increase the productive efficiency of delivery of government services. This paper is one of the first to evaluate this claim empirically by looking at the association between expenditure decentralization and the productive efficiency of government using a data-set of Swiss cantons. We first provide careful evidence that expenditure decentralization is a powerful proxy for factual local autonomy. Further panel regressions of Swiss cantons provide robust evidence that more decentralization is associated with higher educational attainment. We also show that these gains lead to no adverse effects across education types but that male students benefited more from educational decentralization closing, for the Swiss case, the gender education gap. Finally, we present evidence of the importance of competence in government and how it can reinforce the gains from decentralization.

The CGIAR Systemwide Program on Collective Action and Property Rights (CAPRi) is an initiative of the 15 centers of the Consultative Group on International Agricultural Research (CGIAR). The initiative promotes comparative research on the role of property rights and collective action institutions in shaping the efficiency, sustainability, and equity of natural resource systems. CAPRi’s Secretariat is hosted within the Environment and Production Technology Division (EPDT) of the International Food Policy Research Institute (IFPRI). CAPRi Working Papers contain preliminary material and research results. They are circulated prior to a full peer review to stimulate discussion and critical comment. It is expected that most working papers will eventually be published in some other form and that their content may also be revised

Abstract: The large-scale expansion of primary schooling in developing countries has led to the increasing use of non-civil-service contract teachers who are hired locally by the school, are not professionally trained, have fixed-term renewable contracts, and are paid much lower salaries than regular civil-service teachers. This has been a controversial policy, but there is limited evidence on the effectiveness of contract teachers in improving student learning. We present experimental evidence on the impact of contract teachers using data from an 'as is ' expansion of contract-teacher hiring across a representative sample of 100 randomly-selected government-run rural primary schools in the Indian state of Andhra Pradesh. At the end of two years, students in schools with an extra contract teacher performed significantly better than those in comparison schools by 0.16σ and 0.15σ, in math and language tests respectively. Contract teachers were also much less likely to be absent from school than civil-service teachers (18 % vs. 27%). Combining the experimental reduction in school-level pupil-teacher ratio (PTR) induced by the provision of an extra contract teacher, with high-quality panel data estimates of the impact of reducing PTR with a regular civil-service teacher, we show that contract teachers are not only effective at improving student learning outcomes, but that they are no less effective at doing so than regular civil-service teachers who are

Many developing countries are experimenting with decentralisation of public service delivery to elected local governments instead of bureaucrats appointed by a central government. We study the resulting implications in a theoretical model in which the central government is uninformed about local need and unable to monitor service allocations. Bureaucrats charge bribes for services as monopoly providers, resulting in underprovision of services, especially for the poor. Local governments are directly responsive to their citizens needs but may be subject to capture by elites. Effects of decentralisation on service volumes, efficiency and equity are analysed under different financing arrangements for local governments. The theme of the 2004 World Development Report is summarised by its opening paragraph: Too often, services fail poor people – in access, in quantity, in quality. But the fact that there are strong examples where services do work means governments and citizens can do better. How? By putting poor people at the center of service provision: by enabling them to monitor and discipline service providers, by amplifying their voice in policy-

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Abstract: Ensuring accountability of local functionaries for effective delivery of basic social services has been a perennial problem of development. Since the poor have limited prospects of ‘exit’, ‘voice ’ alone works to ensure effectiveness of service delivery. Accountability of lower-level functionaries to superiors in a vertical line ministry is rarely effective. The paper spells out a model of deep democratic decentralization that has been demonstrated to work in a number of countries. Copyright # 2005 John Wiley & Sons, Ltd. If the Millennium Development Goals are to be achieved, the past failures of state provision of social services will have to be addressed. In education, public health and water services there have been systematic problems of state provision—poor quality, low performance, limited responsiveness and weak accountability. As a result, and in response to these problems of state failure, there has been a recent move towards promoting the private sector and privatization of social services. However, this paper argues that there are recent developments in deep democractic decentralization—all in the 1990s—that provide evidence that it is possible to devise effective policy responses to these problems of state failure. The problems of state provision of basic services do not result from