Bribery, democracy and their impact on governance and welfare: The case of rural India

Raghbendra Jha, Hari K Nagarajan and Anirudh Tagat ()

ASARC Working Papers from The Australian National University, Australia South Asia Research Centre

Abstract: Participation in welfare programs, administered by local government (Panchayats) is a significant source of consumption expenditure for households in rural India. In the context of imperfect local governance, we hypothesize that access to such programs may be limited, thus creating incentives for households to bribe in order to gain access. Using a 10-year panel dataset, we jointly estimate determinants of bribes, participation in welfare programs, and consequent change in economic welfare of households. We show that bribing does improve program participation and thence private consumption. Factors such as deepening democracy and increased fiscal buoyancy improve the quality of governance and increase the rate of participation in welfare programs and reduce the incidence of bribes.

Keywords: corruption; democratization; decentralization; rural development (search for similar items in EconPapers)
JEL-codes: D63 D73 H11 O12 (search for similar items in EconPapers)
Pages: 40
Date: 2017
New Economics Papers: this item is included in nep-dev
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Persistent link: https://EconPapers.repec.org/RePEc:pas:asarcc:2017-03

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