Corruption, investments and contributions to public goods: Experimental evidence from rural Liberia

We analyze how corruption affects incentives to invest or contribute to public goods. We obtain a proxy for corruption among Liberian community leaders by keeping track of a flow of inputs associated with a development intervention, measuring these inputs before and after giving them in custody to t...

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Bibliographic Details
Published in:Journal of public economics Vol. 115; pp. 37 - 47
Main Authors: Beekman, Gonne, Bulte, Erwin, Nillesen, Eleonora
Format: Journal Article
Language:English
Published: Elsevier B.V 01.07.2014
Subjects:
community-driven development
conflict
cooperation
Corruption
elite capture
field experiment
Field experiments
government
growth
Individual behaviour
indonesia
leaders matter
Leadership
Liberia
management
Private investment
Public goods
Rural areas
Rural population
Leadership
O12
Corruption
O17
C9
K42
Field experiments
Z13
ISSN:0047-2727, 1879-2316
Online Access:Get full text
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Summary:We analyze how corruption affects incentives to invest or contribute to public goods. We obtain a proxy for corruption among Liberian community leaders by keeping track of a flow of inputs associated with a development intervention, measuring these inputs before and after giving them in custody to the chief. We then use the “gap” between these measurements (“missing inputs”) to explain variation in investment behavior of villagers. Investment behavior is gauged with two simple artefactual field experiments. Our main results are that corruption (i) undermines incentives for voluntary contributions to local public goods and (ii) may reduce private investments of individuals subject to rent-seeking by the chief in real life. We also provide weaker evidence that the impact of corruption on investments and contributions to public goods is heterogeneous: this impact may be gender-specific and appears to vary with accessibility of communities. •We study how corruption affects investment in private and public goods.•We measure corruption by tracking inputs to a sample of Liberian communities.•Corruption undermines incentives for voluntary contributions to local public goods.•Corruption may reduce investments of people subject to rent-seeking in real life.•The impact of corruption appears to vary with accessibility of communities.
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ISSN:0047-2727
1879-2316
DOI:10.1016/j.jpubeco.2014.04.004