Corruption and Local Governance: Evidence from Karnataka

The paper examines corruption in the institutions of local government in Karnataka, using a Logit model. One of the arguments in favour of decentralisation in developing countries is that it provides a favourable environment to responsive planning, and promotes greater accountability in the provision of public services. An assumption is also that people’s participation in development activities increases transparency of the activities of the government, and thereby also reduces corruption in the utilization of public funds. Evidence from Karnataka shows that while institutions of local governance provide a structure for public service delivery, there are several factors that influenced governance. These include measures of accountability and transparency and their effectiveness, the perceived risks of indulging in corrupt practices, abuse of patronage relations, and lack of any significant political opposition.