Monitoring Corruption: Can Top-down Monitoring Crowd-Out Grassroots Participation?

Abstract

Empirical evidence on the effectiveness of grassroots monitoring is mixed. This paper proposes a previously unexplored mechanism that may explain this result. We argue that the presence of credible and effective top-down monitoring alternatives can undermine citizen participation in grassroots monitoring efforts. Building on Olken’s (2009) road-building field experiment in Indonesia; we find a large and robust effect of the participation interventions on missing expenditures in villages without an audit in place. However, this effect vanishes as soon as an audit is simultaneously implemented in the village. We find evidence of crowding-out effects: in government audit villages, individuals are less likely to attend, talk, and actively participate in accountability meetings. They are also significantly less likely to voice general problems, corruption-related problems, and to take serious actions to address these problems. Despite policies promoting joint implementation of top-down and bottom-up interventions, this paper shows that top-down monitoring can undermine rather than complement grassroots efforts.

Keywords: Corruption, monitoring, grassroots

JEL Classification: O12, D70, D73