Grand Corruption in the Contracting Out of Public Services: Lessons from a Pilot Study in Colombia

Abstract

We find evidence that transparency interventions can reduce corrupt behavior in circumstances which theory predicts are least favorable to them and that are often associated with “grand corruption”: when corrupt actors are few and politically influential; their behavior imposes small costs on many; and it is difficult to observe. These conditions characterize the Colombian School Meals Program. Nevertheless, informal audits and text messages to parents appear to curb corruption in the provision of school meals. The study yields detailed information about how actors respond to the intervention and the substantial methodological challenges the response creates, especially large spillover effects from treated to control groups. Additional evidence begins to disentangle mechanisms. Parental mobilization increased after the intervention but some effects are best explained by operator concern that systematic evidence of corrupt behavior would trigger enforcement actions by high-level enforcement agencies outside of the political jurisdictions where they are most influential.

Keywords: corruption, information, transparency, audits, contracting out

JEL Classification: D73, H4, H42