Corruption and the provision of health care and education services

Government intervention to correct market failures is often accompanied by government failures and corruption. This is no more evident than in social sectors that are characterised by significant market failures and government intervention. However, the impact of corruption on the public provision of social services has not been analysed. This paper reviews the relevant theoretical models and users' perceptions of corruption in the public provision of social services. It then provides evidence that reducing corruption can result in significant social gains as measured by decrease in percentage of primary school dropout rates. It concludes firstly that improvements in education services do not necessarily require higher public spending; secondly that it is likely that a reduced level of corruption in the provision of services would help improve their quality; thirdly, that conditions that facilitate private sector entry into the provision of public services would limit the government ability to charge bribes; and, finally, that participation of the poor in the decisions that influence the allocation of public resources would mitigate corruption possibilities.