How can governments in low-income countries reduce capture of public funds? This World Bank working paper demonstrates the success of a Ugandan newspaper campaign that has enabled schools and parents to monitor a large-scale grant programme. It suggests that empowering users of public services through access to information can be an effective strategy to combat local corruption and capture of funds.
Anti-corruption programmes generally rely on legal and financial institutions to enforce accountability. However, in many poor countries, these institutions tend to be weak and among the most corrupt. In the mid-1990s, in Uganda, only 20 percent of government grants to primary schools were actually reaching their target. Much of the money was being captured by local officials and politicians for patronage politics and other activities. Most schools did not even realise they were entitled to the grants. In response, the government decided to raise awareness by publishing data on monthly fund transfers in the press. Notices were also posted in schools, and monitoring and supervision strengthened. According to a public expenditure tracking survey carried out to measure the impact of the campaign, in 2001 schools received around 80 percent of their annual entitlements. This suggests that increased public access to information can reduce capture of funds at local level.
Alongside raw data, the study uses regression analysis to estimate the effects of increased public access to information. Findings include the following:
- In the mid-1990s, the degree of capture was similar in schools with and without access to newspapers, but in 2001, schools with access to newspapers suffered significantly less.
- Head teachers with access to newspapers were, on average, more familiar with the rules governing the grant programme and the timing of releases of funds.
- Access to newspapers had no impact on head teachers’ scores in knowledge tests, suggesting that lower capture resulted from better information on grants rather than ability plus newspaper access.
- Distance to the nearest newspaper outlet was used as an instrument for wider exposure to the campaign (via parents, for example). A strong relationship was found between proximity to an outlet and lower capture.
The Ugandan government succeeded in dramatically reducing district-level capture of an educational programme by means of a bottom-up, relatively inexpensive information campaign. Considerations for policy makers are that:
- This action benefited poor people most. Previously, they were less able than others to claim their entitlement, but by 2001, inequality of access to funds according to income was eliminated.
- While the extent of capture tumbled, for many schools it remains a problem. On average, a fifth of funding still does not reach schools, and about 30 percent receive less than two-thirds of their entitlement.
- Some regions have more severe problems of capture than others. However the spread of information has helped reduce differences in access to funding within regions.
- Local capture in education programmes is a problem in other African countries. A common denominator is that users have limited knowledge about the public funding to which they are entitled.
- Rather than making service providers accountable to policy makers alone, the most effective solution may be to engage citizens at the bottom of the delivery chain, as in Uganda.
