One Size Fits All? Decentralization, Corruption, and the Monitoring of Bureaucrats
Summary The majority of theoretical and empirical studies on the relationship between decentralization and corruption argue that the devolution of power might be a feasible instrument for use in keeping corruption at bay. We argue that this result crucially depends on the effectiveness of monitoring bureaucrats' behavior. The benefits of decentralization only occur if there is a supervisory body such as a free press, which is often lacking in a substantial number of countries. Using cross-country data, we analyze the relationship between decentralization and corruption, taking different degrees of the freedom of the press into account. Our main finding is that decentralization counteracts corruption in countries with high degrees of freedom of the press, whereas countries without effective monitoring suffer from decentralization. Our policy implication is that a free press is a necessary pre-condition for successful decentralization programs.
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