IDEAS home Printed from https://ideas.repec.org/a/eee/wdevel/v38y2010i4p631-646.html
   My bibliography  Save this article

One Size Fits All? Decentralization, Corruption, and the Monitoring of Bureaucrats

Author

Listed:
  • Lessmann, Christian
  • Markwardt, Gunther

Abstract

Summary The majority of theoretical and empirical studies on the relationship between decentralization and corruption argue that the devolution of power might be a feasible instrument for use in keeping corruption at bay. We argue that this result crucially depends on the effectiveness of monitoring bureaucrats' behavior. The benefits of decentralization only occur if there is a supervisory body such as a free press, which is often lacking in a substantial number of countries. Using cross-country data, we analyze the relationship between decentralization and corruption, taking different degrees of the freedom of the press into account. Our main finding is that decentralization counteracts corruption in countries with high degrees of freedom of the press, whereas countries without effective monitoring suffer from decentralization. Our policy implication is that a free press is a necessary pre-condition for successful decentralization programs.

Suggested Citation

  • Lessmann, Christian & Markwardt, Gunther, 2010. "One Size Fits All? Decentralization, Corruption, and the Monitoring of Bureaucrats," World Development, Elsevier, vol. 38(4), pages 631-646, April.
    • Handle: RePEc:eee:wdevel:v:38:y:2010:i:4:p:631-646
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0305-750X(09)00194-6
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Brunetti, Aymo & Weder, Beatrice, 2003. "A free press is bad news for corruption," Journal of Public Economics, Elsevier, vol. 87(7-8), pages 1801-1824, August.
    2. G. Gulsun Arikan, 2004. "Fiscal Decentralization: A Remedy for Corruption?," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 11(2), pages 175-195, March.
    3. Freille, Sebastian & Haque, M. Emranul & Kneller, Richard, 2007. "A contribution to the empirics of press freedom and corruption," European Journal of Political Economy, Elsevier, vol. 23(4), pages 838-862, December.
    4. Graf Lambsdorff, Johann, 2005. "Determining trends for perceived levels of corruption," Passauer Diskussionspapiere, Volkswirtschaftliche Reihe V-38-05, University of Passau, Faculty of Business and Economics.
    5. Freille, Sebastian & Haque, Mohammad Emranul & Kneller, Richard Anthony, 2007. "Federalism, decentralisation and corruption," MPRA Paper 27535, University Library of Munich, Germany.
    6. Gary S. Becker, 1974. "Crime and Punishment: An Economic Approach," NBER Chapters, in: Essays in the Economics of Crime and Punishment, pages 1-54, National Bureau of Economic Research, Inc.
    7. Fisman, Raymond & Gatti, Roberta, 2002. "Decentralization and Corruption: Evidence from U.S. Federal Transfer Programs," Public Choice, Springer, vol. 113(1-2), pages 25-35, October.
    8. Daniel Lederman & Norman V. Loayza & Rodrigo R. Soares, 2005. "Accountability And Corruption: Political Institutions Matter," Economics and Politics, Wiley Blackwell, vol. 17(1), pages 1-35, March.
    9. La Porta, Rafael & Lopez-de-Silanes, Florencio & Shleifer, Andrei & Vishny, Robert, 1999. "The Quality of Government," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 15(1), pages 222-279, April.
    10. Enikolopov, Ruben & Zhuravskaya, Ekaterina, 2007. "Decentralization and political institutions," Journal of Public Economics, Elsevier, vol. 91(11-12), pages 2261-2290, December.
    11. Witold J. Henisz, 2002. "The institutional environment for infrastructure investment," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 11(2), pages 355-389.
    12. Guido Tabellini, "undated". "Constitutional determinants of government spending," Working Papers 162, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
    13. Stephen Knack & Philip Keefer, 1995. "Institutions And Economic Performance: Cross‐Country Tests Using Alternative Institutional Measures," Economics and Politics, Wiley Blackwell, vol. 7(3), pages 207-227, November.
    14. Olivier Blanchard & Andrei Shleifer, 2001. "Federalism With and Without Political Centralization: China Versus Russia," IMF Staff Papers, Palgrave Macmillan, vol. 48(4), pages 1-8.
    15. Dan Stegarescu, 2005. "Public sector decentralisation: measurement concepts and recent international trends," Fiscal Studies, Institute for Fiscal Studies, vol. 26(3), pages 301-333, September.
    16. Fan, C. Simon & Lin, Chen & Treisman, Daniel, 2009. "Political decentralization and corruption: Evidence from around the world," Journal of Public Economics, Elsevier, vol. 93(1-2), pages 14-34, February.
    17. Fisman, Raymond & Gatti, Roberta, 2002. "Decentralization and corruption: evidence across countries," Journal of Public Economics, Elsevier, vol. 83(3), pages 325-345, March.
    18. Rodden, Jonathan, 2003. "Reviving Leviathan: Fiscal Federalism and the Growth of Government," International Organization, Cambridge University Press, vol. 57(4), pages 695-729, October.
    19. Oguzhan Dincer & Christopher Ellis & Glen Waddell, 2010. "Corruption, decentralization and yardstick competition," Economics of Governance, Springer, vol. 11(3), pages 269-294, June.
    20. Benjamin A. Olken & Patrick Barron, 2009. "The Simple Economics of Extortion: Evidence from Trucking in Aceh," Journal of Political Economy, University of Chicago Press, vol. 117(3), pages 417-452, June.
    21. Treisman, Daniel, 2000. "The causes of corruption: a cross-national study," Journal of Public Economics, Elsevier, vol. 76(3), pages 399-457, June.
    22. Pranab Bardhan & Dilip Mookherjee, 2006. "Decentralisation and Accountability in Infrastructure Delivery in Developing Countries," Economic Journal, Royal Economic Society, vol. 116(508), pages 101-127, January.
    23. Chowdhury, Shyamal K., 2004. "The effect of democracy and press freedom on corruption: an empirical test," Economics Letters, Elsevier, vol. 85(1), pages 93-101, October.
    24. Bennett, John & Estrin, Saul, 2006. "Corruption and Bureaucratic Structure in a Developing Economy," IZA Discussion Papers 2156, Institute of Labor Economics (IZA).
    25. Sebastian G. Kessing & Kai A. Konrad & Christos Kotsogiannis, 2007. "Foreign direct investment and the dark side of decentralization [‘Capture and governance at local and national levels’]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 22(49), pages 6-70.
    26. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64(5), pages 416-416.
    27. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-838, May.
    28. Huther, Jeff & Shah, Anwar, 1998. "Applying a simple measure of good governance to the debate on fiscal decentralization," Policy Research Working Paper Series 1894, The World Bank.
    29. Ai, Chunrong & Norton, Edward C., 2003. "Interaction terms in logit and probit models," Economics Letters, Elsevier, vol. 80(1), pages 123-129, July.
    30. repec:bla:ecopol:v:17:y:2005:i::p:1-35 is not listed on IDEAS
    31. Pranab Bardhan, 2002. "Decentralization of Governance and Development," Journal of Economic Perspectives, American Economic Association, vol. 16(4), pages 185-205, Fall.
    32. Paolo Mauro, 1995. "Corruption and Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(3), pages 681-712.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Nadia Fiorino & Emma Galli & Fabio Padovano, 2015. "How long does it take for government decentralization to affect corruption?," Economics of Governance, Springer, vol. 16(3), pages 273-305, August.
    2. Nadia Fiorino & Emma Galli & Fabio Padovano, 2013. "Do fiscal decentralization and government fragmentation affect corruption in different ways? Evidence from a panel data analysis," Chapters, in: Santiago Lago-Peñas & Jorge Martinez-Vazquez (ed.), The Challenge of Local Government Size, chapter 5, pages 121-147, Edward Elgar Publishing.
    3. Changwony, Frederick Kibon & Paterson, Audrey S., 2019. "Accounting practice, fiscal decentralization and corruption," The British Accounting Review, Elsevier, vol. 51(5).
    4. Roberto Dell’Anno & Désirée Teobaldelli, 2015. "Keeping both corruption and the shadow economy in check: the role of decentralization," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 22(1), pages 1-40, February.
    5. Keith Blackburn & Gareth Downing, 2015. "Deconcentration, Corruption and Economic Growth," Centre for Growth and Business Cycle Research Discussion Paper Series 209, Economics, The University of Manchester.
    6. Andreas Kyriacou & Oriol Roca sagalés, 2009. "Fiscal descentralization and the quality of government: evidence from panel data," Hacienda Pública Española / Review of Public Economics, IEF, vol. 189(2), pages 131-155, June.
    7. Jorge Martinez-Vazquez & Santiago Lago-Peñas & Agnese Sacchi, 2017. "The Impact Of Fiscal Decentralization: A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 31(4), pages 1095-1129, September.
    8. Krisztina Kis-Katos & Günther G. Schulze, 2013. "Corruption in Southeast Asia: a survey of recent research," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 27(1), pages 79-109, May.
    9. Jetter, Michael & Parmeter, Christopher F., 2018. "Sorting through global corruption determinants: Institutions and education matter – Not culture," World Development, Elsevier, vol. 109(C), pages 279-294.
    10. Bin Dong & Benno Torgler, 2010. "The Causes of Corruption: Evidence from China," Working Papers 2010.72, Fondazione Eni Enrico Mattei.
    11. Anisah Alfada, 2019. "Does Fiscal Decentralization Encourage Corruption in Local Governments? Evidence from Indonesia," JRFM, MDPI, vol. 12(3), pages 1-14, July.
    12. Günther G. Schulze & Bambang Suharnoko Sjahrir & Nikita Zakharov, 2016. "Corruption in Russia," Journal of Law and Economics, University of Chicago Press, vol. 59(1), pages 135-171.
    13. Karthik Reddy & Moritz Schularick & Vasiliki Skreta, 2020. "Immunity," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 61(2), pages 531-564, May.
      • Karthik Reddy & Moritz Schularick & Vasiliki Skreta, 2012. "Immunity," Working Papers 12-17, New York University, Leonard N. Stern School of Business, Department of Economics.
      • Karthik Reddy & Moritz Schularick & Vasiliki Skreta, 2013. "Immunity," Working Papers 13-04, New York University, Leonard N. Stern School of Business, Department of Economics.
      • Karthik Reddy & Moritz Schularick & Vasiliki Skreta, 2013. "Immunity," CESifo Working Paper Series 4445, CESifo.
    14. Michael A. Nelson, 2013. "Corruption and the size of local governments: are they related?," Chapters, in: Santiago Lago-Peñas & Jorge Martinez-Vazquez (ed.), The Challenge of Local Government Size, chapter 4, pages 83-120, Edward Elgar Publishing.
    15. Ivar Kolstad & Arne Wiig & Vincent Somville, 2014. "Devolutionary delusions? The effect of decentralization on corruption," CMI Working Papers 10, CMI (Chr. Michelsen Institute), Bergen, Norway.
    16. Bin Dong & Benno Torgler, 2010. "The Causes of Corruption: Evidence from China," Working Papers 2010.72, Fondazione Eni Enrico Mattei.
    17. Michael Jetter & Christopher F. Parmeter, 2016. "Uncovering the determinants of corruption," Working Papers 2016-02, University of Miami, Department of Economics.
    18. Kalenborn, Christine & Lessmann, Christian, 2013. "The impact of democracy and press freedom on corruption: Conditionality matters," Journal of Policy Modeling, Elsevier, vol. 35(6), pages 857-886.
    19. Gans-Morse, Jordan & Borges, Mariana & Makarin, Alexey & Mannah-Blankson, Theresa & Nickow, Andre & Zhang, Dong, 2018. "Reducing bureaucratic corruption: Interdisciplinary perspectives on what works," World Development, Elsevier, vol. 105(C), pages 171-188.
    20. Oto-Peralías, Daniel & Romero-Ávila, Diego & Usabiaga, Carlos, 2013. "Does fiscal decentralization mitigate the adverse effects of corruption on public deficits?," European Journal of Political Economy, Elsevier, vol. 32(C), pages 205-231.

    More about this item

    Keywords

    decentralization corruption monitoring freedom of press;

    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:wdevel:v:38:y:2010:i:4:p:631-646. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/worlddev .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.