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Explaining Leakage of Public Funds

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  • Reinikka, Ritva
  • Svensson, Jakob

Abstract

Using panel data from an unique survey of public primary schools in Uganda we assess the degree of leakage of public funds in education. The survey data reveal that on average, during the period 1991-95, schools received only 13% of what the central government contributed to the schools’ non-wage expenditures. The bulk of the allocated spending was either used by public officials for purposes unrelated to education or captured for private gain (leakage). Moreover, we find that resource flows and leakages are endogenous to schools socio-political endowment. Rather than being passive recipients of flows from government, schools use their bargaining power vis-a-vis other parts of government to secure greater shares of funding. These results have clear implications for research. The survey findings also had a direct impact on policy.

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File URL: http://www.wider.unu.edu/stc/repec/pdfs/dp2001/dp2001-147.pdf
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Bibliographic Info

Paper provided by World Institute for Development Economic Research (UNU-WIDER) in its series Working Paper Series with number UNU-WIDER Research Paper DP2001/147.

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Length: 38 pages
Date of creation: 2001
Date of revision:
Handle: RePEc:unu:wpaper:dp2001-147

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Keywords: Public services; Education; Private gain; Leakage;

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  1. Di Tella, Rafael & Schargrodsky, Ernesto, 2003. "The Role of Wages and Auditing during a Crackdown on Corruption in the City of Buenos Aires," Journal of Law and Economics, University of Chicago Press, vol. 46(1), pages 269-92, April.
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