Corruption is a significant problem in India and much of the developing world. The inefficiencies engendered by corruption can be a significant drain on local development. While policymakers and the man on the street recognise the importance of the problem, the solution to the problem is quite tricky and, as a result, evades consensus on how best to reduce the menace. A recent economic research concludes that the right combination of external audit and grassroots monitoring by community members, and careful implementation of the same may be effective in reducing corruption.
One approach to reducing corruption suggests that the right combination of monitoring and punishments can control corruption. In practice, however, the very individuals tasked with monitoring and enforcing punishments may themselves be corruptible. In that case, increasing the chances that a low-level official would be monitored by a higher-level official would result only in bribes and other such forms of transfers between the officials, not in a reduction in corruption.
An alternative approach to reducing corruption, which has gained prominence in recent years, is to increase grassroots participation by community members in local-level monitoring. Community participation is now regarded, in much of the development community, as the key not only to reduced corruption but also to improved public service delivery more generally. For example, the entire World Development Report 2004 is devoted to the idea of “putting poor people at the centre of service provision: enabling them to monitor and discipline service providers, amplifying their voice in policymaking and strengthening the incentives for service providers to serve the poor”. The idea behind the grassroots approach is that community members are the people who benefit from a successful programme; therefore, they would have stronger incentives to monitor corruption at the local level than disinterested central government bureaucrats.
However, this grassroots approach has potential drawbacks as well. For example, since the benefit to an individual villager from monitoring public projects is much smaller than the costs borne by such a villager in terms of his time and energy as well as the possible backlash from the corrupt officials, the typical villager may have no incentive to undertake such monitoring. Only a few activist villagers may be inclined to undertake this activity. In the absence of large scale participation, it is quite possible that the corrupt officials ‘capture’ these activist villagers through promises of personal favours and the like. In addition, the local elite may