Korupsi

Harvard researcher Ben Olken spent a summer in Indonesia digging up roads, in an attempt to estimate the extent of corruption. His initial paper looked at the magnitude and correlates of corruption, while his latest compares corruption perceptions and reality, and finds some surprising differences.

Corruption Perceptions vs. Corruption Reality
Benjamin A. Olken
This paper examines the accuracy of beliefs about corruption, using data from Indonesian villages. Specifically, I compare villagers’ stated beliefs about the likelihood of corruption in a road-building project in their village with a more objective measure of ‘missing expenditures’ in the project, which I construct by comparing the projects’ official expenditure reports with an independent estimate of the prices and quantities of inputs used in construction. I find that villagers’ beliefs do contain information about corruption in the road project, and that villagers are sophisticated enough to distinguish between corruption in the road project and other types of corruption in the village. The magnitude of their information, however, is small, in part because officials hide corruption where it is hardest for villagers to detect. This may limit the effectiveness of grass-roots monitoring of local officials. I also find evidence of systematic biases in corruption beliefs, particularly when examining the relationship between corruption and variables correlated with trust. For example, ethnically heterogeneous villages have higher perceived corruption levels but lower actual levels of missing expenditures. The findings illustrate the limitations of relying solely on corruption perceptions, whether in designing anti-corruption policies or in conducting empirical research on corruption.

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One Response to Korupsi

  1. Kevin Cox says:

    I am on an Indonesian email list and there are many “jokes” about corruption and influence. Things like the “joke” about the fellow trying to marry off his son to Bill Gates daughter. He goes to Bill and introduces his son as the vice president of the world bank and then goes to the world bank president and introduces his son as engaged to Gates daughter and suggests he would be a good candidate for vice president. The “tag” message on this one was (and this is how business is done). Not very funny but this sort of story appears quite often.

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