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Zonder onderwerpscode

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Zonder onderwerpscode: economie

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Embezzlement of resources is hampering public service delivery throughout the developing world. Research on this issue is hindered by problems of measurement. To overcome these problems, Barr, Lindelöw, and Serneels use an economic experiment to investigate the determinants of corrupt behavior. They focus on three aspects of behavior: * Embezzling by public servants. * Monitoring effort by designated monitors. * Voting by community members when provided with an opportunity to select a monitor. The experiment allows the authors to study the effect of wages, effort observability, rules for monitor assignment, and professional norms. Their experimental subjects are Ethiopian nursing students. The authors find that service providers who earn more embezzle less, although the effect is small. Embezzlement is also lower when observability (associated with the risk of being caught and sanctioned) is high, and when service providers face an elected rather than a randomly selected monitor. Monitors put more effort into monitoring when they face reelection and when the public servant receives a higher wage. Communities reelect monitors who put more effort into exposing embezzlement. Framing--whereby players are referred to as "health workers" and "community members" rather than by abstract labels--affects neither mean embezzlement nor mean monitoring effort, but significantly increases the variance in both. This suggests that different types of experimental subjects respond differently to the framing, possibly because they adhere to different norms. This paper--a product of Public Services, Development Research Group--is part of a larger effort in the group to use new approaches (behavioral experiments) to explore corruption and the intrinsic motivation of public service providers.

Political corruption. --- Corruption.

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Zonder onderwerpscode: wereldeconomie, ontwikkelingsproblematiek

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Financial sector development is a critical area of effective social protection policy. A well-regulated financial sector can complement government efforts to keep households from falling into poverty - by supplying the instruments needed to pool risks, or to self-insure against losses because of the death, or disability of a household member, unexpected loss of employment, or inability to work in old age. But many of the policy recommendations that can be drawn from the social risk management framework, rest on the strong assumption that risk, and time preferences are uniform across individuals, or households. Policies meant to encourage participation in public pension systems, and to reduce evasion where such systems are mandatory (by more closely aligning benefits with payroll contributions, or introducing individual retirement accounts) implicitly attempt to emulate the savings behavior of individuals, and households faced with fully functioning capital markets, and perfect information. If no allowance is made for variation in preferences, however, the welfare effects of policy reforms will vary across the target population. Mandated social security, even if actuarially fair for most, is likely to impose welfare losses on those less inclined to save, and insure. That said, a clearer picture of individual and household preferences, and how they vary across the population, can help governments design social security systems that complement private savings, and insurance instruments. The authors present the results of a field experiment, designed to produce an empirical measure of risk aversion, and time preferences of selected groups in Chile, which in 1981 pioneered social security reform with a transition to individual retirement accounts. The experiment was designed primarily to establish whether the time, and risk preferences of the self-employed differ significantly from those of wage, and salaried workers. They find no significant differences in mean risk, and time preferences between the self-employed, and employees, or between the contributing, and non-contributing employees. But they find significant differences in these preferences between the contributing, and non-contributing self-employed. Among the self-employed, those who are more patient choose to contribute to the pension system. However, the contributing self-employed are significantly more tolerant of risk than the non-contributing self-employed, a finding that conflicts with the assumption that the formal pension system is the only source of insurance against poverty in old age. The Chilean pension system may be viewed with some trepidation by its pool of potential clients. Since risk aversion declines with education, the participation of the economically active who are free to choose, could be enhanced by a campaign carefully designed to raise awareness, allay fears, and inform people of the benefits of saving for retirement in the formal pension system.

Economics --- Periodicals