The Marginal Disutility from Corruption in Social Programs: Evidence from Program Administrators and Beneficiaries

Arya Gaduh, Rema Hanna and Benjamin A. Olken

American Economic Review: Insights, 2024, vol. 6, issue 1, 105-19

Abstract: Concerns about fraud in welfare programs are common arguments worldwide against such programs. We conducted a survey experiment with over 28,000 welfare program administrators and over 19,000 beneficiaries in Indonesia to elicit the "marginal disutility from corruption"—the trade-off between more generous social assistance and losses due to corruption. Merely mentioning corruption reduced perceived program success, equivalent to distributing more than 26 percentage points less aid. However, respondents were not sensitive to the amount of corruption—respondents were willing to trade off $2 of additional losses for an additional $1 distributed to beneficiaries. Program administrators and beneficiaries had similar assessments.

JEL-codes: D73 H53 I32 I38 O15 O17 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1257/aeri.20230008

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