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The role of bribes in rural governance: The case of India

Author

Listed:
  • Raghbendra Jha
  • Hari Nagarajan
  • Kailash C.Pradhan

Abstract

Given that the phenomenon of capture of public programs by sections the population is rampant in developing countries, households can indulge in a strategy to improve their participating in public programs by bribing the suppliers of such programs. This is an important issue affecting both the supply of local public goods and the incidence of corruption. To the best of our knowledge there is no analysis of the impact of bribery on participating in a local public goods program, anywhere. Using a unique data set for rural India this paper addresses the question of whether households bribe elected officials responsible for assuring such supply to improve their access to local public goods. We find considerable evidence of such bribing. We also model the welfare effects of such bribing on groups of households as well as the impact of bribery on aggregate welfare. Several policy conclusions are advanced.

Suggested Citation

  • Raghbendra Jha & Hari Nagarajan & Kailash C.Pradhan, 2013. "The role of bribes in rural governance: The case of India," ASARC Working Papers 2013-03, The Australian National University, Australia South Asia Research Centre.
    • Handle: RePEc:pas:asarcc:2013-03
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    References listed on IDEAS

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    2. Foster, Andrew D & Rosenzweig, Mark R, 2004. "Agricultural Productivity Growth, Rural Economic Diversity, and Economic Reforms: India, 1970-2000," Economic Development and Cultural Change, University of Chicago Press, vol. 52(3), pages 509-542, April.
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    4. Kapteyn, Arie & Fiebig, Denzil G., 1981. "When are two-stage and three-stage least squares estimators identical?," Economics Letters, Elsevier, vol. 8(1), pages 53-57.
    5. Banerjee, Abhijit & Iyer, Lakshmi & Somanathan, Rohini, 2008. "Public Action for Public Goods," Handbook of Development Economics, in: T. Paul Schultz & John A. Strauss (ed.), Handbook of Development Economics, edition 1, volume 4, chapter 49, pages 3117-3154, Elsevier.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Bribery; Program Capture; Welfare Effects; Rural India.;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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