Bribing to Circumvent Capture and Facilitate Participation in Social Programs: Evidence from Indian Villages

Given that the phenomenon of capture of public programs by sections the population is
rampant in developing countries, households can indulge in a strategy to improve their odds
of participating in public programs by bribing the suppliers of such programs. This is an
important issue affecting both the supply of local public goods and the incidence of
corruption. To the best of our knowledge there is no analysis of the impact of bribery on the
odds of participating in a local public goods program, anywhere. Using a unique data set for
rural India this paper addresses the question of whether households bribe elected officials
responsible for assuring such supply to improve their access to local public goods. We find
considerable evidence of such bribing. We also model the welfare effects of such bribing on
groups of households as well as the impact of bribery on aggregate welfare. Several policy
conclusions are advanced.