Decentralization and Corruption in the Philippines

kinds of corruption are more prevalent in the municipal administrators office than in
other offices, perhaps due to the administrator’s office exerting more authority and thus
having more opportunity to extract rents (see Figure 2, more on this subject below).
Nineteen percent of municipal administrators stated that there were cases of bribery in
their office in the last year and a full 32% that there were instances of the theft of funds.
By contrast only 2.4% of municipal health officers (MHO’s) reported incidents of bribery
in their office; however 16.5% did report the theft of funds.
In terms of the public private comparison for schools there seems to be evidence of
a small amount of corruption in both private and public schools with, if anything, more
corruption in the private sector. It is difficult to say anything concrete with such sparse
evidence but perhaps we can suggest that private and public sector practices be examined
in some detail before privatization is proposed as a remedy for corruption.
We next created an index of corruption from its various components. This index is
correlated at 0.5 or above with most of its components for both the municipal
administrator and the municipal health officer. Of course we would expect it to be
correlated with its components simply by construction, but only at about 1/7~0.14, as it
has 7 components, not at 0.5 or above. These high correlations reflect positive
correlations among the components of the index- which we do not list to conserve space.
These correlations are the first sign that our index is measuring some coherent underlying
variable.
We had also asked a general question on “how common is corruption in the
municipal government” and if our index was a good measure of corruption we would
expect it to be correlated with the answer to this question. In fact the indices are highly
correlated with the answers to this general question at 0.32 (p-value=0.00) for
administrators and 0.42 (p-value =0.00) for health officials.
While reassuring, correlations within surveys are not in themselves clear evidence
of measuring some genuine underlying reality. Answers to different questions by the
same person may suffer from individual specific bias, which would create a correlation
between answers to different questions. If the different measures of corruption really
measured corruption in the municipal government, we would expect the answers to be
4 Klitgaard’s earlier book “Controlling corruption” (1988) used the definiton “abuse of public office for
private gain” and popularized that definition. His new book “Corrupt cities” (2000) uses the definition used
here.
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