Tag Archives: public expenditure

Lessons from the “Isolated Capital” Effect for the Fight Against Public Corruption

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As numerous commentators have written on this blog and elsewhere, the New York state legislature suffers from a serious corruption problem (see, for example, here and here), with six corruption convictions of government leaders in eleven years, and suspicions that the rot runs much deeper. Would things be any better if New York’s capital were in New York City rather than in Albany? While it’s impossible to say for sure, research suggests—perhaps surprisingly—that the answer might be yes. In an influential paper, Filipe Campante and Qhoc-Anh Do found that, on average, corruption (as measured by federal corruption-related crime convictions per capita) is higher in states where the state capital is more “isolated”—that is, farther from the state’s major population centers. (States with relatively isolated capitals include not just New York (Albany), but also Illinois (Springfield), South Carolina (Columbia), Nevada (Carson City), and Florida (Tallahassee), among others.)

Of course, states are very unlikely to relocate their capitals, but understanding the likely mechanisms that explain Campante and Do’s surprising finding may help us better understand the sorts of policy levers that might help reduce corruption in state government. So why might it be the case that states with more isolated capital cities might have more corruption? Continue reading →

It’s Time to Stop Branding Public Works in the Philippines

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In a post a few months ago, Matthew noted some challenges involved with education initiatives in the Philippines, where income disparities played a significant role in the success of an anti-vote-buying campaign. In particular, poor Filipinos perceived one campaign as condescending or insulting, and believed that the middle- and upper-class individuals behind those campaigns demonstrated a lack of respect in their approach to voter education. The issue goes much deeper than a single poorly-executed education campaign. Even popular anticorruption movements—such as the one that ousted President Joseph Estrada in 2001—were divided along class lines. Poorer Filipinos celebrated (and continue to regard) Estrada as a champion of the poor, while middle- and upper-class Filipinos demanded his resignation following allegations of plunder.

This tension between socioeconomic classes affects countless issues tied to Philippine corruption—from how Filipinos view their politicians, to how they define corruption at all. In his post, Matthew noted one such definitional problem–whether a politician helping constituents to pay for expenses associated with events like funerals or weddings can be classified as “vote buying”–but there are many other similar socioeconomic disparities in the perception of such interactions. It seems that members of different socioeconomic classes expect different things from their local, provincial, and national governments and politicians. To many of those facing extreme poverty, receiving a free birthday cake each year, or having government officials pay for a funeral, are not acts of impropriety, but rather are demonstrations of goodwill and a concern for wellbeing—values which they admire in political candidates.

But the conceptual problem is not simply borne of economic disparity. In many ways, politicians exacerbate these problems by “branding” public acts as their own personal contributions to society, rather than as official acts of their office. A simple drive around any Philippine province demonstrates the extent of this problem. Countless bridges, banners, buses, public housing units, food, disaster relief goods, and even announcements of recent public school graduates prominently feature the names and photographs of politicians. These purposeful efforts to put ones personal stamp on government works are insidious and must be eradicated from Philippine politics.

Continue reading →

Combating Corruption in Uganda or Merely Displacing it: The World Bank’s Public Expenditure Tracking Survey

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A World Bank-initiated effort to reduce corruption in school funding in Uganda is widely, and rightly, celebrated for its results (click here and here for background).  In the early nineteen nineties on average 87 percent of the monies the Ugandan central government budgeted for textbooks and other school supplies “leaked out” somewhere between departing the Finance Ministry and arriving at the school house front door.  Yearly data revealed that 73 percent of the schools received less than five percent of the monies to which they were entitled, and only ten percent received more than half.  The 1996 Bank project had an immediate effect on the rate of losses.  By 1999 the government found schools were receiving on average 95 percent of what they were supposed to receive, and a 2002 World Bank study likewise showed a sharp drop in fund leakage.

The dramatic improvement is attributed to the enormous publicity the data on losses garnered.  Parents were outraged and the government and donor agencies embarrassed.  Within the development community, the Uganda Public Expenditure Tracking Survey, as the work to dig out and publicize the loss data became known, has been enormously influential, the story becoming a parable for how to fight corruption.  A Uganda-like PETS project is now routinely prescribed for attacking corruption in public expenditures, and a Google search on “Uganda PETS” yields over 100,000 hits and returns some 20,000 citations on Google scholar.

But for all the attention the effort has generated, there is evidence that it may not have had any impact on the level of corruption in Uganda.  It is possible that all it did was force those raking funds off the school fund program to turn elsewhere.  The Uganda PETS thus may simply have displaced the corruption in the school funding program rather than ending it. Continue reading →