Corruption Perceptions vs. Corruption Reality

Benjamin Olken

No 6272, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Accurate citizen perceptions of corruption are crucial for the political process to effectively restrain corrupt activity. This paper examines the accuracy of these perceptions by comparing Indonesian villagers' stated beliefs about corruption in a road-building project in their village with a more objective measure of `missing expenditures' in the project. I find that villagers' beliefs do contain real information, and that villagers are sophisticated enough to distinguish between corruption in a particular road project and general 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. I also find that there are biases in beliefs that may affect citizens' monitoring behaviour. For example, ethnically heterogeneous villages have higher perceived corruption levels and greater citizen monitoring, 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.

Keywords: beliefs; Corruption; Perception (search for similar items in EconPapers)
JEL-codes: D73 (search for similar items in EconPapers)
Date: 2007-04
New Economics Papers: this item is included in nep-dev, nep-pol, nep-ppm and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Corruption perceptions vs. corruption reality (2009)
Working Paper: Corruption perceptions vs. corruption reality (2006)
Working Paper: Corruption Perceptions vs. Corruption Reality (2006)
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