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

Author

Listed:
  • Arya Gaduh
  • Rema Hanna
  • Benjamin A. Olken

Abstract

Concerns about fraud in welfare programs 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,’ i.e., the trade-between more generous social assistance and losses due to corruption and fraud. Merely mentioning corruption reduced perceived program success, equivalent to distributing more than 20 percent 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.

Suggested Citation

  • Arya Gaduh & Rema Hanna & Benjamin A. Olken, 2023. "The Marginal Disutility from Corruption in Social Programs: Evidence from Program Administrators and Beneficiaries," NBER Working Papers 30905, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:30905
    Note: DEV POL
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    Cited by:

    1. Kotlikoff, Laurence J. & Lagarda, Guillermo & Marin, Gabriel, 2023. "A Personalized VAT with Capital Transfers: A Reform to Protect Low-Income Households in Mexico," IDB Publications (Working Papers) 12985, Inter-American Development Bank.

    More about this item

    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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