The Marginal Disutility from Corruption in Social Programs: Evidence from Program Administrators and Beneficiaries
American Economic Review: Insights
vol. 6,
no. 1, March 2024
(pp. 105-19)
Abstract
Concerns about fraud in welfare programs are common arguments worldwide against such programs. We conducted a survey experiment with over 28,000 welfare program administrators and over 19,000 beneficiaries in Indonesia to elicit the "marginal disutility from corruption"—the trade-off between more generous social assistance and losses due to corruption. Merely mentioning corruption reduced perceived program success, equivalent to distributing more than 26 percentage points less aid. However, respondents were not sensitive to the amount of corruption—respondents were willing to trade off $2 of additional losses for an additional $1 distributed to beneficiaries. Program administrators and beneficiaries had similar assessments.Citation
Gaduh, Arya, Rema Hanna, and Benjamin A. Olken. 2024. "The Marginal Disutility from Corruption in Social Programs: Evidence from Program Administrators and Beneficiaries." American Economic Review: Insights, 6 (1): 105-19. DOI: 10.1257/aeri.20230008Additional Materials
JEL Classification
- D73 Bureaucracy; Administrative Processes in Public Organizations; Corruption
- H53 National Government Expenditures and Welfare Programs
- I32 Measurement and Analysis of Poverty
- I38 Welfare, Well-Being, and Poverty: Government Programs; Provision and Effects of Welfare Programs
- O15 Economic Development: Human Resources; Human Development; Income Distribution; Migration
- O17 Formal and Informal Sectors; Shadow Economy; Institutional Arrangements