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Impact Assessment Case Study: Monitoring Corruption in Indonesia

Impact Assessment Case Study: Monitoring Corruption in Indonesia. Nick York and Miguel Valadez Laric Economist, Evaluation Department 15 th November 2006. 1 Palace Street, London SW1E 5HE Abercrombie House, Eaglesham Road, East Kilbride, Glasgow G75 8EA. Issues.

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Impact Assessment Case Study: Monitoring Corruption in Indonesia

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  1. Impact Assessment Case Study: Monitoring Corruption in Indonesia Nick York and Miguel Valadez Laric Economist, Evaluation Department 15th November 2006 1 Palace Street, London SW1E 5HE Abercrombie House, Eaglesham Road, East Kilbride, Glasgow G75 8EA

  2. Issues • Limited Empirical Evidence on Mitigating Corruption though Monitoring • 2 Empirical Questions: • Effectiveness of Top Down Approach (Becker and Stigler 1974) • Effectiveness of Grassroots Monitoring (poor people’s interests vs local elites) 1 Palace Street, London SW1E 5HE Abercrombie House, Eaglesham Road, East Kilbride, Glasgow G75 8EA

  3. Background • Study Conducted 2003-2004 by Harvard Researcher Ben Olken • Funded by DFID/World Bank Strategic Poverty Trust Fund. • Subject: Kecamatan Development Project, Village infrastructure. • Focus: East and Central Java • www.nber.org/~bolken 1 Palace Street, London SW1E 5HE Abercrombie House, Eaglesham Road, East Kilbride, Glasgow G75 8EA

  4. Method • Data sample: 608 villages • Roads about to be built. • Randomly assign audits to villages and inform ex ante (clustering due to spillovers) • Randomly assign accountability meetings • Independent randomization of two alternatives plus control villages- some overlap. 1 Palace Street, London SW1E 5HE Abercrombie House, Eaglesham Road, East Kilbride, Glasgow G75 8EA

  5. Measuring Corruption • Independently estimate actual expenditures of building roads • Incorporate measures of quality • Compare “reported” with “actual estimated” expenditures: isolate missing expenditures • Compare missing expenditures control and treatment to unpack impact of each type of monitoring. 1 Palace Street, London SW1E 5HE Abercrombie House, Eaglesham Road, East Kilbride, Glasgow G75 8EA

  6. Results: Top Down Audits • Corruption found in missing materials and labour expenditure not misreported goods prices. • Audits reduced corruption by 8% on average • Benefits are 150% of cost of audit • Threat of Audit enough for effect: not due to audit corrective measures 1 Palace Street, London SW1E 5HE Abercrombie House, Eaglesham Road, East Kilbride, Glasgow G75 8EA

  7. Results: Grassroots Monitoring • Accountability Meeting attendance raised by 40%. • Substantial Reductions in missing labour expenditures 9 – 18% . • Small, non-significant reduction in missing materials expenditure. • Since bulk of cost is in materials overall effect is negligible. • Hypotheses: information, incentives, public good? 1 Palace Street, London SW1E 5HE Abercrombie House, Eaglesham Road, East Kilbride, Glasgow G75 8EA

  8. Impact Evaluation Case Study: Monitoring Corruption in Indonesia Nick York and Miguel Valadez Laric Economist, Evaluation Department 15th November 2006 1 Palace Street, London SW1E 5HE Abercrombie House, Eaglesham Road, East Kilbride, Glasgow G75 8EA

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