Decentralization of Corruption

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Decentralized Corruption or Corrupt

Decentralization? Community Monitoring

of Poverty-Alleviation Schemes in Eastern India

RENE VERONUniversity of Guelph, Ont., Canada

GLYN WILLIAMSUniversity of Sheffield, UK

STUART CORBRIDGE and MANOJ SRIVASTAVA *

London School of Economics, UK

Summary. Democratic decentralization and community participation often stand at the centerof an agenda of good governance that aims to reduce corruption and increase the states account-ability to its citizens. However, this paper suggests based on empirical studies on the EmploymentAssurance Scheme in rural West Bengal that the strength of upward accountability (especially topolitical parties) is as crucial as downward accountability to communities. When these vertical

accountabilities are weak, horizontal accountability structures between local civil society and offi-cials can mutate into networks of corruption in which community actors become accomplices orprimary agents. 2006 Elsevier Ltd. All rights reserved.

Key words corruption, decentralization, participation, poverty alleviation, West Bengal, India

1. INTRODUCTION

Development theory has recently paid in-creased attention to issues of accountabilityand transparency. Corrupt practices and sys-tems are said to undermine growth and accessto public services, in addition to being morallyrepugnant. 1 The question of corruption, how-ever, is dealt with very differently by competingintellectual and policy-making traditions.Drawing on Anne Kruegers early work onrent-seeking, many neoliberal economists havesought to connect landscapes of corruption tothe dominance of predatory states or bureau-

cratic populism. They have recommended therolling back of the stateof the license andpermit raj in the case of Indiaas the primary

means of dealing with corruption and rent-seeking behavior. The structural adjustment

programs that were implemented by the WorldBank and the IMF in the 1980s and early 1990sthus remained relatively silent on accountabil-ity structures in non-market institutions. They

* We would like to acknowledge the financial support of

the United Kingdom Economic and Social Research

Council, as well as the Department for International

Development (DFID), for this research. The views pre-

sented in our analysis, however, are our own and

not necessarily those of DfID. Final revision accepted:November 10, 2005.

World Development Vol. 34, No. 11, pp. 19221941, 2006 2006 Elsevier Ltd. All rights reserved

0305-750X/$ - see front matter

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trusted that the expansion of free markets andcompetition would remove the scope for gener-alized rent seeking.

After two decades of deregulation and eco-nomic liberalization, however, levels of political

and bureaucratic corruption seem not to havedissipated in most countries, and perhaps leastof all in the transitional economies of theformer Soviet bloc (see Humphrey, 2002).Whereas many hard-liners might insist that cor-ruption persists only where liberalization hasbeen incomplete, or where states have been leftwith too many regulatory powers, many donoragencies are promoting an agenda of goodgovernance that seeks to address issues ofaccountability and transparency on a broaderfront. In doing so, they follow political scien-

tists who increasingly regard corruption as asign of bad governance. Dhareswar and col-leagues have argued that corruption ought tobe seen as a symptom of the states fundamentalweaknesses, not some basic or single determi-nant of societys ills (Dhareswar et al., 2000,p. 136; emphasis added), and that appropriatedesigning of political and economic institutionswould therefore be capable of defeating wide-spread rent-seeking (see also Rose-Ackerman,1999). 2 Multi-pronged strategies for strength-ening good governanceincluding public-

sector and judicial reforms, economic policymeasures and financial controls, the strengthen-ing of civil liberties, and of structures of partic-ipation of civil societyare thus proposed as away of dealing with bad governance. Proposalsfor decentralization have also cut into initia-tives for the promotion of good governanceand have been proposed as a conduit for insti-tutional public reform that can enhance levelsof political accountability, participation andvoice (see World Bank, 2000a, 2001). Decen-tralization now stands at the heart of a bundle

of measures that is meant to enhance statecapabilities (see World Bank, 2000b).

This comprehensive view of anti-corruptionstrategies is an important step forward, andparticularly so when compared to the moresimplistic perspectives linking reduced corrup-tion to a rolling back of the state. But theframework of good governance continuesto see state actors as the prime agents ofcorrupt practicesa view that is reflected inthe classic and commonly used definition ofcorruption as the abuse of public office for

private [economic and political] gain (Dhare-swar et al., 2000, p. 137; see also Bardhan,1997). It is true that the agenda for good gov-

ernance looks beyond the state sector andstresses the importance of public participation,but civil society makes an appearance mainly asa safeguard against corrupt officials (see WorldBank, 2000a). Yet recent critical studies on par-

ticipatory development also reveal the funda-mental weaknesses of many local communityinstitutions that are divided along the lines ofclass, gender or ethnicity (see Leach, Mearns,& Scoones, 1997). This paper thus takes a crit-ical look at the practices of civil society, andat the complex relationsas well as blurredboundaries (Gupta, 1995)between the stateand civil society. Such a perspective takes inspi-ration from the works of Harriss-White andWhite (1996), amongst others. Based on coun-try case studies, Harriss-White and White

found that in many cases rent-seeking had in-creased under economic liberalization and hadchanged its character: corruption was nowmore likely to be initiated and controlled by ac-tors in civil society, including businesspersons,than it was by state actors. Formal democrati-zation had created opportunities, incentivesand pressures for politicians and elected offi-cials to compensate for political uncertaintyby building up a capital stake through corrup-tion (Harriss-White & White, 1996, p. 3). Cor-bridge and Kumar (2002) made a similar point

in their study of the tree trade in Jharkhand.While their paper argues for a reduction ofstate controls in some parts of the timber trade,they show how local elites and political brokershave joined with some forest officials in resist-ing the deregulation of trade in the jack(fruit)tree. Robbins (2000) has further shown thatthe rural poor in Rajasthan are driven to par-ticipate in the corruption of forms of commonproperty management from which they mightbe expected to benefit.

This paper aims to go beyond recent

critiques of participatory development thatfocus on the perils of assuming strong andhomogenous communities to suggest, inaddition, that key members of village com-munities can be accomplices to, or primeagents of, local networks of corruption. Collu-sion can of course transcend the boundaries ofa community, as Mosse (2001) has shown inhis studies of the Western India RainfedFarming Project. In this case it was mostlybetter-off and male villagers, and outsidersfrom the project staff, who joined together

in homogenizing and representing localknowledge and local needs. In other cases, acollision of interests can form corruption

DECENTRALIZED CORRUPTION OR CORRUPT DECENTRALIZATION 1923
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networksa term we borrow from Jean Car-tier-Bresson, who found that in France andItaly the organization of corruption by socialnetworks [. . .] prevails and enables a real insti-tutionalization of procedures that turns into

a political, economic and social exchange(1997, p. 466). Rent-seeking then consists ofrather more than distortions to simple marketexchanges or bargains between individuals.In certain circumstances, it can lead to thebuilding of social institutions that rely onand reinforce trust among their major partici-pants.

These ideas provide useful conceptual start-ing points for a paper that seeks to illuminatethe complex relationships between decentraliza-tion, civil society, and corruption in eastern In-

dia. The objective of our paper is to investigatehow formal structures of decentralization andparticipation influence the prevalence, charac-ter and spaces of corruption in different socialand political settings. We focus on interactionsbetween the community, elected officials andcivil servants that have constrained and enabledthe leaking of government funds from IndiasEmployment Assurance Scheme (EAS) in twolocalities in rural West Bengal. We chose toanalyze the EAS because of its distinctive com-munity-based system of funds monitoring that

allows us to draw conclusions on the interrela-tion between participatory decentralization andcorruption. However, we do not claim to pro-vide a representative and comprehensive studyof the level and organization of corruption inWest Bengal or India. 3 Neither do we believethat leakage from the EAS is particularly ram-pant. 4

In Section 2 we discuss contrasting hypothe-ses regarding the effects of decentralization onrent-seeking. These focus on the elite captureof participatory programs and their distortion

by higher level officials. We also explain howwe tried to deal with the challenge of studyingcorruption empirically. In Section 3 we describethe Employment Assurance Scheme (EAS) anda monitoring system that can be interpreted asa mesh of horizontal and vertical accountabilitystructures designed to break the nexus of powerrelations that can hold between governmentofficers, politicians and private contractors. Inthe next three sections we turn our attentionto Old Malda block (Malda district) and Debrablock (Midnapore district). Section 4 intro-

duces the social, political and economic settingsof the field sites, and compares the levels, forms

and perceptions of corruption that are commonthere. Despite having identical formal institu-tions of local governance and community mon-itoring, leakage of EAS funds was much higherin Old Malda than in Debra. In Section 5 we

take a closer look at corruption networks inOld Malda block, networks in which localcouncilors, beneficiary-committee membersand ordinary villagers were all participating.The deep decentralization of governmentprograms was accompanied here by the decen-tralization of corruption to local councilorswho were virtually unaccountable to the com-munity, political parties or the developmentadministration. Councilors generally did notbelong to the traditional elite. They formed anewly emerging class of political entrepreneurs

that had captured the decentralized state forpurposes of private gain and which inhibitedthe effective functioning of community-basedmonitoring schemes. In Section 6 we show thatthese same formal community monitoring insti-tutions were much more effective in curbingcorruption in Debra block. If community insti-tutions were distorted here, it was mainlybecause they were subject to the extended armof the ruling party, the Communist Party ofIndia-Marxist (CPI-M). Indeed, upwardaccountability in the form of effective party-

political control over local councilors, execut-ing agents and beneficiary committees, wasprobably more important for limiting corrup-tion in Debra than was community participa-tion. The CPI-M effectively controlled leakageof EAS funds, but not without diverting somedevelopment money into party coffers. Ironi-cally, some of these funds from central govern-ment were used to strengthen local government.In Section 7 we conclude that participatorydecentralization is no panacea for reducing cor-ruption, as some factions within communities

are ready to build a nexus with bureaucratsand politicians. Under such circumstances,the strengthening of horizontal accountabilitystructures through decentralization is ineffec-tive in curbing corruption. In the absence ofeffective vertical structures of political andadministrative accountability and control, aswell as perceptible judicial involvement, 5 hori-zontal accountability structures between localcivil society and officials can mutate into net-works of corruption in which communityactors become either primary agents or accom-

plices, particularly when communities are di-vided.

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2. STUDYING CORRUPTION

Strong advocacy of administrative anddemocratic decentralization as part of a goodgovernance agenda is based on a number of

assumptions. Ostrom, Schroeder, and Wynne(1993) suggest that decentralization can pro-mote cost-effectiveness, improved accountabil-ity and reduced corruption. Decentralizationis said to bring the state closer to its citizens(see also Azfar, Kahkonen, & Meagher,2001). Local politicians and elected councilorsare assumed to be more effective and interestedin monitoring the activities of local governmentofficers than distant civil servants and auditorsbecause they are open to de-selection (see Bard-han & Mookherjee, 2001). In other words, local

elected officials would become accountabledownwards to the local community. Decen-tralization can also provide spaces forenhanced rates of participation in civil society.Participatory decentralization is assumed to in-crease local vigilance, particularly when accom-panied by fiscal devolution or the collection ofuser fees (see Azfar et al., 2001). Proponents ofdecentralization believe that horizontalaccountability structures between local officialsand civil society will reduce the scope for rentseeking. From this viewpoint, any failure of

decentralization to curb corruption is the resultof incomplete or distorted decentralizationorreferring to the title of this paper corruptdecentralizationwhere too much authorityis retained at the central level.

Empirical studies from India and elsewhereconcur that resistance within the bureaucracycan hinder and distort effective democraticdecentralization (see Jha, 1999; Mukarji,1999). But effective decentralization also de-pends on the strength of the communitiesaffected and on underlying informal social,

economic and political structures (see Alsop,Krishna, & Sjoblom, 2001; Nambiar, 2001).Furthermore, political support from above,and in the form of a strong pro-poor govern-ment in power at the center, is crucial in reduc-ing the risk of elite capture of decentralizedstate institutions (see Crook & Sverrisson,2001; Kohli, 1987). Although research ondecentralization has been expanding rapidly,only a few studies have empirically testedthe proposition that decentralization leads toa reduction in the levels of corruption. The

majority of decentralization-corruption studieshave been either logical-deductive models or

regression analyses based on public perceptions(e.g., Azfar et al., 2001).

As an example of theoretical modeling, Bard-han and Mookherjees analysis of decentralizedversus centralized delivery systems in the con-

text of infrastructure services provides a usefulpoint of entry. They conclude that decentraliza-tion provides welfare gains and lower levels ofcorruption only if services are financed withuser fees. Where decentralization is financedwith local taxes or central grants, the effect onrent seeking is indeterminate (Bardhan &Mookherjee, 2001). This obviously applies toanti-poverty programs, including IndiasEmployment Assurance Scheme, where localgovernments have authority over implementa-tion using central grants, but where other forms

of financial devolution, including the collectionof user fees from the beneficiaries, wouldmake little sense in view of stated equity goals.Elsewhere, the same authors analyzed anti-pov-erty programs more specifically. They deducedthat better cost-effectiveness and reducedbureaucratic corruption would occur under adecentralized system of administration despiteincreased coordination problems, lack of econ-omies of scale and lower capacity at the localgovernment level (Bardhan & Mookherjee,2000). Making use of a principal-agent frame-

work, they argued that decentralization canmitigate the problem of high information coststhat exist in bureaucratic top-down systems,where bottlenecks in communication and diffi-culties in obtaining information constrain theeffective monitoring of local officers (agents)by the central authority (principal). 6 However,the benefits from reduced information costs caneasily be outweighed if the capture of local gov-ernment and anti-poverty schemes by localelites is greater than the extent of elite captureof national government. Elite capture of the

state at different spatial scales depends on tra-ditions of political participation, voter aware-ness and literacy, allocation of social andeconomic power within communities, lobbyingand campaign contributions by wealthiergroups, fairness and regularity of elections,transparency in local decision-making pro-cesses and government accounts, media atten-tion and so on (Bardhan & Mookherjee,2001, p. 3; see also Bardhan & Mookherjee,2000). These authors thus predict less effectiveand less well targeted implementation of decen-

tralized programs in regions of high povertyincidence. 7

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We studied corruption in rural West Bengal asone part of a collaborative research project thatinvestigated the states activities and roles inrelation to rural poverty and empowerment infive localities in eastern India (see Figure 1).

The spheres of activities of the state were di-vided into developmental, empowering, protec-tive, and disciplinary functions, which werestudied with reference to the EAS, primary edu-cation, tenure- and labor-law enforcement, andpolicing, respectively. In order to capture bothhorizontal and vertical accountability struc-tures, and corruption networks that transcenddifferent spatial scales, we moved constantly be-tween the village, block, and district levels. Theteam worked intensively in one fairly typicalvillage community in each of the selected dis-

tricts. Local field assistants and the authorslived with the communities for most of 1999and spring 2000. In addition to using a widerange of ethnographic methods, we conductedan extensive questionnaire survey with a strati-fied random sample of 100 households, includ-ing 80 that were identified as poor on thebasis of data on assets, employment, householdcomposition and food security from an earliervillage census (see also Corbridge, Williams,Srivastava, & Veron, 2005). The questionnaireincluded a few questions on perceptions of cor-

ruption of officials, and on the fairness of thecourts and the police. Information was alsogained from informal conversations with indi-vidual or groups of villagers. This research gaveus insights into local perceptions and under-standings of corruption, 9 and pointed to inci-dents that could be studied further. However,these data are limited because many villagersdid not have a clear picture of the corruptionnetworks at work. In some cases, informantsalso feared retribution and avoided the topicor underplayed its significance.

More informative data came from more than40 interviews with local government officers,elected councilors, contractors, and so on ineach locality. It was helpful that our researchtopic was a broad one, since before raisingthe issue of corruption with the intervieweeswe were in many cases able to build trust fromrepeated household and office visits. We alsomust admit that we sometimes needed luckto be in the right place at the right time. 10

Although there was certainly concealment aswell as exaggeration, some intervieweespar-

ticularly those who stood at, or were pushedto, the margins of the corruption networksopened up and gave us valuable information.

Yet this information had to be evaluated inthe broader political and social context in orderto exclude, as far as possible, false or exagger-ated allegations of corruption that were madewith the objective of damaging a persons or a

political partys reputation. Although obtain-ing access to official files and records was dif-ficult, if not impossible, the triangulation ofinformation obtained from different intervie-wees and observations allowed us to crackthe corruption networks, and to draw a fairlyclear qualitative picture of corruption and itsorganization in Old Malda and Debra. Weare aware that generalizations about levelsand organization of corruption from thesetwo case studies must be treated with caution.But we trust that the qualitative empirical re-

search points to the general problems of decen-tralization and corruption. 11

3. MONITORING THE EMPLOYMENTASSURANCE SCHEME

The Government of India was aware thatcorruption networks emerged around theimplementation of poverty-alleviation schemeswhen it introduced the Employment AssuranceScheme (EAS) in 1993. Within the EAS and

other recent poverty-alleviation schemes, thegovernment particularly attempted to breakthe nexus between bureaucrats, politicians andprivate builders (contractors) by including localcommunities in scheme implementation andmonitoring. 12 At the time of our fieldwork,the EAS was the largest employment provisionprogram in India. The central government(with 20% matching funds from state govern-ments) aimed to respond to local employmentshortages during agricultural slack seasons,and provide up to 100 days of local employ-

ment to a maximum of two adults per house-hold. Like other wage-employment or foodfor work programs, the EAS directly ad-dressed one of the most pressing needs of therural poor, that is, seasonal unemployment.The government encouraged the uptake oflabor-intensive projects from which the poorwould benefit the most. In each block the laborcomponent of expenditure had to average atleast 60% (and the material component maxi-mum 40%), with schemes that were focusedon water and soil conservation measures

(40%), minor irrigation works (20%), roads(20%) and school buildings (20%). The pro-gram was unlikely to be of much interest to

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the better-off villagers, as the principal benefitwas short-term unskilled manual labor thatwas to be paid at the government minimumwage. It could therefore be expected that self-targeting would be effective, and that uptake

by non-poor beneficiaries would be much lowerthan in, say, subsidized credit schemes such asthe Integrated Rural Development Program(since 1999 known as SGSY, SwaranjayantiGram Swarozgar Yojana).

But the central and state governments alsointroduced direct measures to curb leakage ofEAS funds. They designed a monitoring systemthat combines a set of accountabilities, includ-ing downward accountability to the commu-nity, horizontal accountability between actorsat the same spatial scale, and upward account-

ability to higher levels of the bureaucracy. Firstof all, the Government of India banned con-tractors (private professional builders) fromthe execution of EAS projects, which were sup-posed to be fairly small. Policymakers believedthat these small schemes would not require theorganizational and technical expertise of pri-vate professionals. The exclusion of contractorswas expected to reduce leakage, as it would sti-fle the rent-seeking opportunities for govern-ment officers created by the tender system.Instead of private contractors, government offi-

cers such as the Sub-Assistant Engineers at theblock level and the Job Assistants at the grampanchayat level were to organize and supervisethe works. Furthermore, the guidelines pro-vided for the appointment of a job workerfrom the community to act as an executingagent on behalf of the government officers.The job worker was to be elected by the villag-ers or to be appointed by the local councils.This local person was believed to be moreaccountable to the community than outsidecontractors or government officers and, as a

joint beneficiary of newly created village assets,would have a personal interest in keeping leak-age low. Therefore, it was expected that jobworkers would abstain from common corruptpractices, such as over-reporting labor in themuster rolls, underpaying local workers, inflat-ing the figures in the measurement sheets andusing inferior-quality materials.

The Government of West Bengal attemptedto further increase local accountability of theEAS and other anti-poverty programs. Thestate government ordered that for each project,

a beneficiary committee would have to beformed with the responsibilities of monitoringproject implementation and supervising the

job worker and the involved government offi-cer. The beneficiary committee was to beelected in a special village meeting prior to thestart of the works, where villagers were also in-formed about the assets to be created and days

of employment provided with the particularproject. As the name suggests, the members ofthe committee would consist of beneficiariesof the project and thus be involved in the man-ual work. Community control of the EAS inWest Bengal was further strengthened with asocial audit, namely, the public presentationof project expenditures in the statutory bian-nual gram sansad or village meeting for all(ca. 5001,000) voters of the electoral ward. 13

Democratic accountability was ensured bymaking the panchayats (elected local councils),

specifically the panchayat samiti (block council,intermediate tier between village council [grampanchayat] and district council [zilla parishad])the implementing agency of the EAS. Thiswas possible in West Bengal unlike in mostother states because the panchayats had beenwell established at the time when the EASwas introduced in 199394. On the recommen-dation of West Bengals Department of Panch-ayats and Rural Development, district andblock councils could devolve the implementa-tion of EAS projects to the gram panchay-

ats again strengthening local accountability.The bureaucracy facilitated the implementationwith their organizational and technical exper-tise and procedures. The Block DevelopmentOfficer (BDO), the senior-most officer at theblock level, acted as the official executive agentand was supported by the Block Cashier, Sub-Assistant Engineers, etc. and the gram panch-ayat-level Secretary and Job Assistant.

Table 1 summarizes the responsibilities ofvarious actors in the local monitoring of theEAS, reflecting the high degree of community

involvement. The executing agent, or jobworker, comes from the community itself, andthe beneficiary committee and elected localcouncilors check the job workers activities.While the Sub-Assistant Engineer, and forsmaller works the Job Assistant, take the mea-surements of completed works, their technicaldocumentation has to be accompanied by acompletion letter from the beneficiary commit-tee. Only then can the BDO and block councilprepare and submit the utilization certificatenecessary to draw further EAS funds from the

central government.This complex multi-actor monitoring system

includes a triangle of local horizontal account-

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ability structures formed by the beneficiarycommittee, local councilors and local govern-

ment officers (see Figure 2). Having these threeactors check on each other is likely to reducethe risk of collusion between any one of themand the executing agent, who may well becomethe site of leakage (without necessarily beingthe main instigator) due to the hands-onresponsibilities of preparing employment re-cords (muster rolls), paying laborers andarranging the supply of materials. Figure 2 alsoindicates that the actors involved in the localmonitoring of the EAS are embedded in verti-cal (downward and upward) accountability

structures. Local government officers are mon-itored by their seniors, and EAS documents are

checked at higher levels of the bureaucracy. Butthe local monitoring of the EAS complementsthe conventional bureaucratic checks withcommunity accountability and with politicalaccountability, which are also given promi-nence in the decentralization literature.Community accountability is expected to be en-sured through the beneficiary committee that isdirectly accountable downward to the commu-nity, as its members are elected or feel moralpressure from below. Political accountabilityof the councilors to the voters is assumed to be

CommunityAccountability

Political/DemocraticAccountability

BureaucraticAccountability

ExecutingAgent

Local GovtOfficers

ElectedCouncilors

BeneficiaryCommittee

Figure 2. Monitoring of the Employment Assurance Scheme in West Bengal.

Table 1. Local monitoring of the EAS: main actors and responsibilities

Employment records(Muster Rolls)

Material supplyforms

Measurementof completed work

Completionletter

Utilizationcertificate

Job worker (foreman) P PBeneficiary committee S S P + SElected councilors S SBlock council chairperson SJob assistant/sub-assistant

engineerP P + S

Block DevelopmentOfficer

P + S

P = Prepare; S = Sign.



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effective due to the panchayat elections heldregularly every five years.

4. SCOPE AND LEVELS OF CORRUPTION

IN OLD MALDA AND DEBRA

It can not, of course, be expected that theapparently well-designed EAS monitoring sys-tem would be capable of totally eliminatingleakage on the ground, or that the formal mon-itoring system would work equally in differentsocial, economic and political contexts. There-fore, it is necessary to illuminate the regionalcontext of the case studies and to locate EASleakage in the wider context of corruption inthe studied areas.

Old Malda has a diverse population, includ-ing general caste Hindus, Scheduled Castes(formerly untouchable castes), ScheduledTribes (various adivasi groups), Muslims andrecent clandestine immigrants from nearbyBangladesh. Serious tensions arise regularly be-tween these community groupsin our studyvillage tensions were mainly between the bet-ter-off, general-caste Hindu immigrants fromBangladesh on the one hand, and the generallypoor Santals (Scheduled Tribe) and Mal-pahariya (who are variably regarded as Sched-

uled Tribe or Caste). But elsewhere in theblock HinduMuslim conflicts are also consid-erable. Only 48% of the adult population is lit-erate; only 39% of women and less than aquarter of the adivasi population have at leastbasic writing and reading skills. The educationsystem is malfunctioning, and levels of generalawareness and political consciousness are verylow. According to our own household classifi-cation based on assets, employment and house-hold composition, 69% of the households arepoor, out of which 32% face seasonal food in-

security. 14 Rain-fed agriculture provides onlylimited and seasonal employment, and manypoor households rely on non-agricultural daylabor in Malda town. Seasonal out-migrationis high from September to November whenlarge tracts of land are inundated. The Com-munist Party of India-Marxist (CPI-M) formedthe block council but shared power with theIndian National Congress (INC) in the grampanchayat. Politics is based around personal-ized networks of patronage and violence, andnot on strong party organizations. The political

leadership lacked deep roots in the locality (seeVeron, Corbridge, Williams, & Srivastava,2003).

Debras population is more stable. Substan-tial adivasi immigration into a predominantlygeneral-caste Hindu population occurred about50 years ago. Social tensions between the maincommunity groups rarely came to the surface in

the study village.15

The population is bettereducated and politically more conscious thanthe one in Old Malda. 68% of the people inthe study village are literate, and further effortsin child and adult education have been fairlysuccessful. Irrigated agriculture provides al-most year-round employment, and the landreforms in the late 1970s have reduced the vul-nerability of sharecroppers. But the povertyrate is still 45% with 11% of the households fac-ing seasonal food insecurity. The CPI-M hasbeen a dominant presence in the study village,

also forming the block council and the grampanchayat. The party has a strong local organi-zation with offices in every gram panchayat andcommittees in every village. Tribal peasants, inparticular, formed a strong support base for theCPI-M. By the late 1990s, however, the partyfaced increasing political competition from theTrinamool Congress (TC), which enjoyedgrowing support among sections of the ruralmiddle class.

A glance at the figures in Table 2 on theincidence of corruption as perceived by the

villagers appears to support Bardhan andMookherjees hypothesis that levels of corrup-tion are higher in areas of high poverty andilliteracy. Table 2 suggests that the levels ofcorruption were higher in Old Malda than inDebra: 36% and 10%, respectively, of the villag-ers reported that officials would be corrupt, andmost of these allegations were backed up withconcrete incidents (these figures probablyunder-report perceived corruption to some de-gree due to respondents fear of retribution).Confirming our assumption that rent seeking

behavior of government officers is not the sole

Table 2. Villagers perception of corruption

Old Malda (%) Debra (%)

Yes, they do 36 10No, they do not 47 86Refused to comment 6 0Do not know 11 4

Total 100 100

Answers to the question whether government officers,local councilor or politician would sometimes misusetheir position for personal gain.Source: Village surveys.



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mover of corruption, villagers in Old Maldamentioned as the bribe-taker elected panchayatmembers twice as often as civil servants. Inmany cases, panchayat members and officerswere both mentioned, indicating some aware-

ness of the political-bureaucratic nexus. Re-ported incidents of corruption in Debra wereprimarily related to political party workers.Interestingly, 20% of those who mentionedany corruption case in either locality did notsee themselves as simple victims of corruptpractices. They were content because the pay-ment of a bribe (ghush) allowed them to accessa government service or benefit to which theywere formally not entitled. Others were upsetwhen the payment of a bribe did not result inprompt delivery of the demanded service. At

a more general level, however, villagers re-garded (the system of) corruption as despicable(see also endnote 7). The practice of bribery(even the collection of small bakshish or thepayment of speed money [upori ai]) was seenas morally wrong. Arguments (on which weprompted) that low salaries or honorariumsof civil servants and panchayat members, orthe perquisite of holding public office, would

justify bribery fell on deaf ears among the verypoor in rural West Bengal.

In both studied localities, the payment of

bribes, including speed money, between Rs.50 and 500 (US$ 1.10 and 11) for the (faster)provision of government services (e.g., deliveryof birth certificates, ration cards and landdeeds) seemed fairly common (see Table 3).However, it was only in Old Malda that asignificant number of villagers experienced orobserved that kick-backs amounting to a fewthousand rupees had to be paid to receive sub-sidized loans (through schemes such as the Inte-grated Rural Development Programme or the

Indira Awas housing scheme); that funds fromwage-employment programs (e.g., the EAS)were diverted; and that nepotism and politicalfavoritism were endemic. Ordinary villagersrarely found these forms of corruption cultur-

ally acceptable (see also endnote 8).In the case of the EAS, on which our research

focused, the findings suggest that skimming-offgovernment funds was much more prevalentthan the rural poor perhaps realized. Table 4shows that less than one-third of the (relativelyfew) EAS beneficiaries in Old Maldabut all inDebrawere paid the minimum wage, whichthe Government of West Bengal had set atRs. 48 (US$ 1.10) per day. Laborers in OldMalda, most of whom were not aware of thestatutory minimum wage, were underpaid by

2065%, with female workers found at thelower end of the wage scale. Through this prac-tice alone, circa 15% of the EAS funds weresiphoned off.

Yet underpaying the intended beneficiaries isnot the only, and rarely the most important,method of diverting money from the EAS. In-deed, a number of candid and well-informedofficials and contractors estimated that in OldMalda depending on the project anywhere be-tween 40% and 80% of the EAS monies fromthe central government would be absorbed

somewhere between the district headquartersand the village. The higher number was sadlyconfirmed when we were able to compare directobservations of works being carried out withofficial records that had entered the wage paidto each laborer under two distinct projects. Inanother instance, we could confirm that a smallroad scheme listed in the official records hadnot been built at all. Local informants in Debraestimated EAS fund leakage to be much lower;that is around 10%. The regional difference inleakage also produced a visible impact in the

case of roads built with EAS monies: the

Table 3. Reported incidents and types of corruptionreported by the villagers

Old Malda Debra

Bribe for service 9 7Kick-back for receiving

government loan/benefit5 0

Diversion of governmentfunds

4 1

Nepotism 12 0Unspecified/other 5 2

Total 35 10

Source: Village surveys.

Table 4. Payment of statutory minimum wage under theEAS

Old Malda (%) Debra (%)

Minimum wage paid 26 75Below minimum wage 63 0Paid by piece rate 5 0Cannot remember 5 25

Total 99%(N = 19)

100%(N = 59)

Source: Village surveys.



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semi-permanent roads in Debra lasted throughthe monsoon while people in Old Malda wereeven in the dry season forced to trample theirown paths beside unusable roads. 16

The decentralized EAS monitoring system

clearly allowed for very different levels of fundleakage within West Bengal, and decentrali-zation probably has further accentuated thedifferences between Debra and Old Malda.Democratic decentralization seems to have re-duced corruption in Debra. Professional build-ers informed us that their profits 17 declinedafter the introduction of decentralized and par-ticipatory implementation and monitoring ofpoverty-alleviation schemes from 50% to 10%on average, and that profits made from schemesimplemented by line departments (e.g., irriga-

tion) as opposed to the panchayats were stillaround 3040%. Both government officers andcontractors in Debra told us that it was partic-ularly tough to carry out EAS projects be-cause of the many political and communitycontrols.

By contrast, decentralization seems to havebeen ineffective, if not counterproductive, tocurb corruption in Old Malda. Clearly, thedecentralized EAS and community-based mon-itoring met more favorable, social, economicand political preconditions in Debra than in

Old Malda. But it would not suffice to regardthese preconditions as the only factors thatdetermine the impact of decentralization oncorruption. Rather, local agency reworks for-mal monitoring institutions, creates corruptionnetworks and thus also produces and repro-duces social and political structures.

5. DEEP DECENTRALIZATION IN OLDMALDA

In Old Malda local councilors played an ac-tive role in reworking the formal EAS monitor-ing system and felt little resistance fromordinary villagers who were kept unaware ofthe EAS and its participatory ideals (see alsoVeron et al., 2003). Local councilors conductedelections to beneficiary committees in the gramsansads after the panchayat elections in 1998.But the biannual gram sansads in Old Maldawere in practice not publicized and thus wereunrepresentative forums. 18 For our researchvillage, four better-off people from different

hamlets were mentioned in the gram panchayatrecords as the members of the beneficiary com-mittee, but we found that they were rarely

involved in the direct monitoring of EASworks. Furthermore, rather than appointing a

job worker from among the EAS beneficiaries,elected members of the panchayat themselvesacted as the executing agent in their respective

constituency. They generally had a high levelof control over small EAS projects. Govern-ment development funds that reached the grampanchayat were equally divided between theindividual councilors for schemes in theirrespective constituency. The local councilorsenjoyed almost full autonomy when spendingtheir allotment for projects, and decentraliza-tion in Old Malda went deeper than plannedfor by the government. As de facto executiveand executing agents, the local councilors veryoften brought in contractors and their groups

of young healthy male workers from outsidethe locality, who were able to complete projectsfaster and cheaper than the intended local EASbeneficiaries. This practice benefited councilorsfrom different political parties and, in theabsence of developmental politics, 19 was quitesuccessful in paying off the political opposition.As a result the decentralized monitoring wascorrupted at a fairly local level (ratherthan by a distant bureaucracy), and communityaccountability was not given much of a chanceto become effective.

However, the example of a small pond-dig-ging project also shows that individuals fromthe community can become part of corruptionnetworks. The fairly well-off and respectedNCM who worked for the Congress Partyduring elections became a member of the ben-eficiary committee on the suggestion of AB,the local councilor (from the CPI-M). NCMexplained candidly: I have good connectionswith, and control over, the villagers here. If Iopposed a project, I would be able to stop itwith the help of my local followers. Fearing

this, [AB] wanted to include me in someway. 20 And things got better when ABdecided to use his allotment from govern-ment wage-employment schemes to repairand deepen a village pond bordering NCMshouse, where the latter also held a lease withfishing privileges. For this EAS project,NCM played an active role as a beneficiary-committee member for the first time. As themain beneficiary of the asset to be created,he had a strong self-interest in the quick andtechnically proper completion of the scheme,

and he supervised the works vigilantly as onewould expect. He was clearly less concernedabout his poor and underemployed neighbors.

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Rather, NCM and AB brought in contractedworkers from elsewhere and paid them at apiece rate to do the job quickly and cheaply.AB and NCM then forged the muster roll withbogus names and thumbprints, and pocketed

the difference between the contractors billand the reported wages. In this way, no localemployment has been created but corruptionhas become decentralized down to the villagelevel.

The decentralization of corruption some-times goes even further, and involves seeminglypetty amounts at the lowest spatial scales.While NCM is not poor and could liberallybe regarded as belonging to the local elite, BScomes from a very poor Santal (adivasi) house-hold in which people would go hungry part of

the year. BS knew that the employment of out-side labor for the above-mentioned scheme wasillegal, and he personally approached AB. Theyoungster, rather than sharing this knowledgewith his fellow villagers (including those fromthe Santal community), was satisfied when hewas paid off with Rs. 112 (US$ 2.50)suppos-edly for two days of supervising the workstokeep silent, and so made it easy for the coun-cilor to avoid a public uproar. The generallyill-informed and divided community in OldMalda certainly weakened downward accoun-

tabilities, but the few better-informed villagersdid little to rectify this and hold councilors orbeneficiary-committee members accountable.Apathetic or dishonest beneficiary-committeemembers were voted out of office only in excep-tional cases and only when their ousting wasbacked or initiated by political agents.

These forms of collusion between local polit-ical society and parts of local civil society seemto be a common feature of poverty-alleviationschemes in Old Malda. The fact that thosefew people who knew of the formal existence

of beneficiary committees (for which the Eng-lish term rather than the Bengali term wasused) nicknamed these bodies benefit commit-tee or benefit company is further proof thatcivil society was at least an accomplice of cor-ruption. A contractor with ample experienceof executing works for poverty-alleviationschemes in the block gave details on the locallypracticed system of cuts: the profit from aproject would be distributed to the beneficiarycommittee (5%); the party fund (i.e., the localparty committee of the CPI-M in Old Malda)

(5%); the Sub-Assistant Engineer (from whereit is probably further divided up within thebureaucracy) (40%); and the involved contrac-

tor (50%). The system of fixed cuts indicatesthat these corruption networks, including theinvolvement of the beneficiary committee, werefairly institutionalized and stable.

However, fissures in corruption networks

would at times become visible either due tointernal conflict or because an external agencytries to intervene in local practices. The net-works can be disturbed, or need to be read-

justed, when a new BDO is appointed to theblock office to head the lower level governmentofficers who have been working there. BDOsare from the West Bengal Civil Servicethesecond tier of Indias bureaucracy after theprestigious Indian Administrative Serviceand rotate posts every 24 years. In some blockoffices in Malda district, young and honest

BDOs have made attempts to disturb corrup-tion networks. For example, when AM tookup her new post in Old Malda, a Sub-AssistantEngineer continued the practice adopted underthe previous BDO of sitting together with hisfour contractor-friends and single-handedlygiving out contracts for all types of poverty-alleviation schemes. AM, who first mistookthe contractors for her staff, faced a violentgherao (blockading of the block office) whenshe tried to implement the government schemesby the book. Even though she was able to have

the said engineer transferred and a more trans-parent public tender system introduced, sheknows that corruption continues in her office.Visibly frustrated after one year as BDO ofOld Malda, AM remarked: I dont [cant] doanything for the poor here. 21

It is true that West Bengals effective land re-form and the reservation of seats in the panch-ayats for women, Scheduled Castes andScheduled Tribes made it easier for people notbelonging to traditional local elites to play anactive part in local councils and local politics

more generally (see Lieten, 1996). Yet it is alsocommon knowledge that a new class of oppor-tunistic, ideologically less committed CPI-Mcouncilors and party workers have emerged inthe years after the Left Front Governmentcame to power in the state. Individual benefit,particularly chances of getting better access tosalaried government employment, has becomean important motive for working for the CPI-M and other parties. If anyone, it is this newpolitical elite that is capturing the local statein West Bengal. 22 Yet the opportunistic behav-

ior of the new political entrepreneurs took apeculiar shape in Malda district, where theCPI-M and its allies (or any other political



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party or coalition) were unable to dominate thepolitical landscape continually. In this situationof political oscillation, local councilors andlocal political brokers could not hope that theirparty would be able to secure them any longer

term benefit, and so maximizing their short-term profits by siphoning off government fundsprovided a welcome alternative. Their actionswere barely constrained by political parties thatwere weakly instituted and embedded in the vil-lages: parties cannot keep local councilors on ashort leash because they depend on these localstrongmen to mobilize votes (see Veron et al.,2003). Local councilors in Old Malda seemedless interested in political power; very few ofthem ever sought reelection. 23 Rather, politicalentrepreneurs weighed monetary costs against

medium-term returns when they took a deci-sion to run for public office. The words of a gram panchayat member talking to a BDOmay be illustrative of this attitude: Sir, nowI must make money from these projects topay for my election expenditures of Rs.50,00060,000 [US$ 1,1501,350]. Later, Illsee that I can make some profit too.

Political entrepreneurs in Old Malda gener-ally are not drawn from the poorest house-holds. Investments in election campaigns (inthe form of hand-outs, such as chicken and

liquor, to the rural poor, but possibly also inthe form of kickbacks for party officials andpayments to thugs) can be substantial, thoughare perhaps not always as high as in theabove-quoted case. Yet the political entrepre-neurs do not belong to traditional elites either.Local councilor AB, for example, came froma SC household with nine members and aneconomically modest background with nolandholdings. Recent profits stemming frompublic office now allowed him to extend hisfamily house. Similarly, DD was in a position

to acquire a scooter only after his wife becamepradhan (village council president). Neighborsresent this new private wealth of their officialdemocratic representatives, but they are inca-pable of hindering its dishonest creation recog-nizing that the villagers are not united andorganized and feeling that they cannot turnto anyone because all from the lower levelswork together. 24 Clientelism also made it dif-ficult for ordinary villagers to take open actionagainst their patrons, including political bro-kers and councilors, who are needed to provide

access to crucial public goods such as disasterrelief and police protection (see Veron et al.,2003).

6. CONTROLLED CORRUPTIONIN DEBRA

Leakage of EAS funds was significantlylower in Debra than in Old Malda. Officers in

the district headquarter of Midnapore spokeenthusiastically about the community mon-itoring of decentralized poverty-alleviationschemes that were seen to be working particu-larly effectively in this district because of highlevels of consciousness, awareness and under-standing among the local people of develop-ment in general, and poverty-alleviationprograms in particular. Adult literacy pro-grams were fairly successful in Midnapore,and the population in our study village wasfairly well educated. Ethnic and class divisions

were not politicized and rarely led to social ten-sions. However, such an explanation that cen-ters on attributes of local communities or civilsociety is incomplete despite the apparent posi-tive correlation between literacy, awareness andcommunal harmony on the one hand, and re-duced corruption in decentralized schemes onthe other hand. Before giving full credit to theapparently strong and harmonious commu-nity in Debra, it is necessary to study the actualrole this community played (or was allowed toplay) in the monitoring of the EAS.

It may come as a surprise that the commu-nity-based monitoring system was in some as-pects more profoundly distorted in Debrathan in Old Malda. In particular, the jobworker and the beneficiary committee werenot selected democraticallynot even in a for-malistic sense. In our study village, the CPI-Mappointed NS, their most influential local partysupporter, as the job worker for all small gov-ernment projects with the exception of a fewroad schemes. The party also handpicked thebeneficiary committee. For nearly all projects,

the beneficiary committee consisted of the samefour or five people known to be loyal to, andworking for, the party. Job worker and benefi-ciary-committee members therefore were notdirectly accountable downward to the commu-nity. Their position was not debated or chal-lenged in public village meetings, in partbecause of their fairly good track record andin part because of the apparent futility ofopenly opposing the CPI-Ms command, giventhe partys strong hold over the village and theexisting political majorities. But once appointed

both job worker and beneficiary committeewere involved in scheme monitoring as pre-scribed by the guidelines.



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The CPI-Ms strong hand in selecting loyalsupporters for the formalized community insti-tutions of implementing and monitoring pov-erty-alleviation schemes in Debra should beseen in the wider context of the partys strategy

of controlling corruption and its decentraliza-tionin the sense of both managing or orga-nizing corruption and constraining or limitingit. Even after more than 20 years in power atthe state and local levels, the local CPI-Mseemed fearful that the formal community-based institutions would be captured by tradi-tional elites, who have largely maintained theireconomic power as employers and moneylend-ers but lost their political significance (see Wil-liams, Veron, Corbridge, & Srivastava, 2003).The vanguard party showed little trust in local

civil society and uncontrolled democratic pro-cesses, and tried to keep control over the newlocal elites, including councilors and partyworkers, through their strong and hierarchicalparty organization. 25 At the same time, theCPI-M measured its success in terms of devel-opment and felt pressure from voters todeliver services efficiently due to increasingpolitical competition. Therefore, individuallocal councilors were not allowed to pick andexecute their own private schemes as theircounterparts in Old Malda did, but the CPI-

M-dominated village and block councilsshort-listed and integrated project proposalsemerging from the gram sansad. Also, the partydid not tolerate personal corruption of theirlowers, and in the past had not hesitated toremove corrupt councilors from public office.The story of a former chairperson of the blockcouncil (sabhapati), who was dismissed frompublic office by the CPI-M in 1993 and subse-quently lost all his political connections andcapital, was still in everybodys mind, and senta warning signal to active party supporters and

councilors. They often invest considerable timeand effort in party work and, although theirmotives may not always be opportunistic, couldlose much when shunned by the party. On theother hand, the CPI-M sometimes rewardshonest and effective councilors. For example,the party was able to arrange salaried govern-ment employment for the hardworking pradhanin our study village.

The partys control of decentralization waseffective in curbing corruption at lower levelsand among community-based organizations.

Job workers and beneficiary committees wereby and large honest, and may only occasionallyhave taken a little advantage of their position,

such as using bits of public road-building mate-rial on their private house path. The lack of for-mal direct accountability downwards to thecommunity was compensatedand perhapsmore than compensatedwith the job workers

and beneficiary committees political account-ability upwards to the CPI-M. This doesnot mean, however, that downward accounta-bilities were irrelevant. The job worker wasconstantly monitored informally by laborerson the scheme and people passing by. Becausepublic information meetings were held beforethe start of each scheme, people knew aboutproject goals in terms of employment and assetcreation. Furthermore, the local council facili-tated a social audit by distributing leaflets onexpenditure for each completed project.

Finally, the CPI-M was accountable to the vot-ers, and corruption was made a major electionissue by the main opposition, the TrinamoolCongress (TC).

Yet the ruling party faced a dilemma. On theone hand, curbing corruption is important forelectoral success. On the other hand, politicalcorruption is an effective way of enhancingparty loyalties and motivation to work for theparty when people are rewarded with betteraccess to government benefits or jobs. Also,voluntary contributions would not suffice to fi-

nance the party machinery given the CPI-Mselectoral base among the rural poor. In orderto balance these conflicting political impera-tives, the party needed to manage corruptionby narrowing the spaces of private and bureau-cratic bribery while diverting some governmentfunds into the party coffers. The common useof the term party donation (besides profit)as the short-hand for corruption indicates thatthe CPI-M was partly successful in implement-ing this strategy. 26

The mid-level cadres of the CPI-M thus dis-

torted the community-based EAS monitoringnot only because of the fear of elite capturebut in part also in order to facilitate the diver-sion of central and state government funds intothe party coffers. 27 One of the reasons for theparty to appoint loyal party supporters as jobworkers and beneficiary-committee membersseemed to be to cover up corrupt practices thatcould financially benefit the party. It was notalways necessary that all beneficiary-committeemembers were involved in this practice. In thestudied village, only one member had sufficient

literacy and numeracy skills to effectively checkmuster rolls and measurement sheets. The jobworker NS admitted that the others were not

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able to sign without my help. 28 With theincreasing strength of the political oppositionand more open challenges to CPI-M dom-ination in some parts of Debra, however,politically mixed beneficiary committees had

become more common and constituted abouthalf of the committees in the block. The BDOreceived an increasing number of allegationsof irregularities mostly from such mixed benefi-ciary committees. Although many of these alle-gations were based on scant evidence and wereperhaps quite strategically employed to gainpolitical mileage, they indicate that cover-upshad become more difficult than in entirelyCPI-M controlled beneficiary committees. Insome cases, complaints were substantiated,and this encouraged accused councilors, con-

tractors and government officers to put theworks right before an official inquiry waslaunched.

The organization of corruption in Debra in-cluded an element of spatial management thatalso made the diversion of government fundsmore orderly than in Old Malda. The blockadministration and council set up two ways ofimplementing schemes: non-road schemes wereimplemented by the gram panchayat and exe-cuted by local job workers; road schemes wereimplemented by the block council with the help

of contractors. Gram panchayat-level employ-ees and councilors were made to believe thatthis practice adhered to the official guidelines.It is true that bigger and technically moredemanding projects needed to be implementedby the block because of their superior technicalcapacities and expertise. The use of profes-sional builders as opposed to local job work-ersthough formally prohibitedcan be

justified on technical grounds as well, but pri-vate builders also received publicly tenderedcontracts for small and technically less

demanding road schemes. In these blockschemes the contractors acted as the conduitfor leakage, 29 and it is suspected that profitswere shared with the Sub-Assistant Engineerand the CPI-M representatives. But the pol-itical and bureaucratic actors embedded inseparate vertical accountability systems alsochecked on each other, and so kept the diver-sion of development funds within reasonablelimits. Recently, the relationship between con-tractor, political party and civil servant hadbeen increasingly disturbed more profoundly

by the less partisan beneficiary committees.Diversion of development funds through local

job workers and under the supervision of local

councilors appeared to be more difficult, andleakage from gram panchayat schemes seemedmuch lower. For example, gram panchayatrecords showed cases in which a few hundredrupees left over from one project were immedi-

ately spent on additional micro-projects ratherthan diverted.

Apart from direct project-related payments,professional builders were expected to makeparty donations at particular times. Forexample, they were asked to donate Rs. 5,000to finance a party-organized cultural eventduring Hul, an adivasi festival in May, whichwas used to represent the CPI-M as the bene-factor of the local Santaland Bhumijcommuni-ties and less subtly as a platform for politicalspeeches.

The development funds diverted into partycoffers were spent to finance election campaignsand the party machinery more generally. Inter-estingly, the CPI-M also used these funds tosupport their pradhans and top up their lowhonorariums provided by the state government.This additional remuneration made it possiblefor many pradhans to focus on their work inpublic office and without searching for addi-tional income from private economic activities.It is ironic that the institutionalized and con-trolled diversion of decentralized funds from

the central government in some ways helpedto strengthen local governance and effectivepolitical decentralization. Corruption in thisparticular case (which is admittedly not thenorm) was perhaps not a form of bad gover-nance altogether.

7. CONCLUSIONS

Democratic decentralization is no panaceafor reducing corruption even when local com-

munities are formally included in implementingand monitoring policies, programs andschemes. As economic and political interestsvary within communities, some factions areready to build a nexus with bureaucrats andpoliticians and become willing participants incorruption networks. The impact of participa-tory decentralization on the levels of corruptionis therefore ambiguous.

The underlying social structures can alsoinhibit participation of the poor and mar-ginalized, and thus render democratic decen-

tralization and community-based monitoringless effective. These findings are in line withBardhan and Mookherjees deductive model

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which predicts that under unequal or clientelistconditions, existing local elites are able to cap-ture the local state so that decentralization relo-cates corruption to the locally powerful andleads to the decentralized corruption of our

title. In contrast to that model, however, ourempirical study indicates that social structuresshould not be regarded as given: decentraliza-tion itself may produce and reproduce them.In Old Malda, for example, the introductionof the panchayat system and the decentralizedimplementation of poverty-alleviation schemescreated the conditions for a new class of politi-cal entrepreneurs to emerge that eventuallycaptured substantial parts of state benefits.These political entrepreneurs do not necessarilybelong to the traditional elites and include

political brokers and local councilors who havestrong roots in local communities. The bound-aries between local political society and localcommunities are blurred, and it is unhelpfulto locate rent-seeking neatly and clearly outsidethe realm of communities.

Elite capture also took place in Debra, butthe net effects on corruption were fairly posi-tive. Mid-level cadres of the CPI-M largely con-trolled the implementation of the EAS andeffectively checked on formal community insti-tutions, local councilors and bureaucrats. The

capture of decentralized poverty-alleviationschemes by elites who are committed to pro-poor development obviously generates morepositive effects than the capture by politicalentrepreneurs who are largely unconstrainedin privately looting government developmentfunds.

In parallel, corrupt decentralizationorthe distortion of community-based monitoringsystemsoccurred in Old Malda and Debra,in both cases caused not by a resisting bureau-cracy or higher levels of government but by

councilors and local political cadres. In OldMalda, this distortion took the form of with-holding information from villagers and notemploying local job workers and beneficiarycommittees. This made the diversion of devel-opment funds easier. In Debra, the bending ofrules, particularly the appointment of politi-cally biased job workers and beneficiary com-mittees, also allowed more leakage. However,the diverted funds mostly ended in party coffersand were in part used to strengthen local gov-ernment. The term corrupt decentralization

ironically gets an additional meaning here; thatis, decentralization made stronger through cor-ruption. Corruption is therefore not alwaysbad governance or a symptom of the statesfundamental weakness.

The findings from the two case studies sug-gest that the strength of upward accountability(especially to political parties) is at least asinfluential as downward accountability to com-munities. When these vertical accountabilitiesare weak, horizontal accountability structuresdesigned into community-based monitoring

systems can degenerate into corruption net-works between community representatives,local elected officials and local government offi-cers. This, in turn, reinforces the argument thateffective decentralization paradoxically dependson strong centralized government institutionsor a strong centralized political party.

NOTES

1. Pranab Bardhan provides a good review of thedebate on the effects of corruption on economicefficiency. He challenges the notion that corruptionwould be the much-needed grease for the squeaking ofwheels of a rigid administration (1997, p. 1322),because corruption does not necessarily mitigate marketdistortions. Schleifer and Vishny (1993) distinguishbetween centralized bribery (to one independent monop-olist) and decentralized bribery (to more than onemonopolist) and show that the former involves morepredictability and certainty for the bribe-giver and thusentails less adverse economic effects. Khan (1996)introduces a more precise typology of corruption that

is based on the political settlement between the patron(state actors taking bribes) and the bribe-paying clients.In the patrimonial settlement, state actors are the

dominant partners in corrupt exchange while in theclientelist settlement, well-organized social groups arecapable of challenging the (property) rights that areweakly defined and enforced by the state. Corrupttransactions under the more prevalent clientelist settle-ment normally lead to inefficient outcomes. Because ofthe interests of the existing powerful clients, rights willnot be reallocated even if this had socially desirableoutcomes and if it helped the officials to maximize theirbribes (Khan, 1996; see also Khan & Jomo, 2000). For acomprehensive collection of key articles on corruption,see also Heidenheimer, Johnston, and LeVine (1989).

2. Olivier de Sardan (1999) provides an interestingcritique of the politicaleconomy approach to corruptionand anti-corruption. Without falling into the traps of



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cultural essentialism or modernization theory, he seescorruption in the African contexts as socially embeddedin [post-colonial cultural] logics of negotiation, gift-giving, solidarity, predatory authority, and redistributiveaccumulation (Olivier de Sardan, 1999, p. 25).

3. See Myrdal (1968), Noorani (1973), Sahai (1995),Mitra (1998), Visvanathan and Sethi (1998), and Gill(1998) for more general assessments of administrativeand political corruption in India. While Myrdalacknowledged the legacy from traditional society(1968, p. 950) of strong loyalties to caste and kin thatwould facilitate nepotism, he was concerned that corruptpractices would start entering higher levels of bureau-cracy and polity. Adding to Myrdals analysis, Noorani(1973) was able to trace back modern Indias roots ofhigh-level corruption to the fact that Nehru seemed to

tolerate the corrupt practices of some of his ministers.Expanding on these views, recent observers state thatever-increasing corruption now has penetrated all levelsof society and has become all-pervasive. Indeed, cor-ruption and bribery are a constant in Indias currentpublic and media discourses. Parry (2000), however,cautions us that the popular impression of ever-increas-ing corruption may be less based on actual experiencethan on an increased commitment to the values of animpersonal state, including the demarcation of publicand private (see also Gupta, 1995).

4. In our research sites, levels of everyday corruption ineducation, for example, through teachers failure to giveclasses and consequent need for private tuition, werehigher than the amounts diverted in the more occasionalEAS projects and other poverty-alleviation schemes.This observation corresponds with a survey fromTransparency International that suggests that Indianspay an annual total of Rs. 267 billion (c. US$ 6 billion,or US$ 6 per person) in the form of bribes while thehealth, education and power sectors account for themost of this (Times of India, December 17, 2002).Unfortunately, the study only assesses bribery in linedepartments so that a comparison of programs imple-mented by local governments cannot be made. Butstudies on developmental and poverty-alleviation pro-grams show that West Bengals panchayats were able todirect a significant portion of government benefits to thepoor (see Bardhan & Mookherjee, 2003).

5. In our field-level research, we did not come acrossany cases of corruption that had been dealt with in thecourts. If the judiciary is underrepresented in our study,it is a result of our research focus on poor peoplesinteractions with the state and low-level corruption.

6. Robert Wades comparative study on irrigationsystem in South Korea and India supports this hypoth-

esis. In South Korea local part-time farmers, who couldbe monitored easily by the village community, wereappointed for the maintenance of irrigation canals. This,as well as better communication and supervision systemswithin the bureaucracy, made the governmental service

delivery more effective than in India where local irriga-tion officials were accountable to their seniors in thebureaucracy rather than to the end users (Wade, 1997).

7. In a recent empirical study of poverty-alleviationprograms in 89 villages in West Bengal, Bardhan andMookherjee found supportive evidence for their theo-retical conclusions: low leakage and proper targeting tothe poor was best in villages with equal land distribu-tion, higher literacy rates among the poor and contestedlocal elections. They explain these results with limitedaccountability of gram panchayats in situations of high

socioeconomic and political inequality at the local level(Bardhan & Mookherjee, 2003).

8. A crude typology of individuals in relation tocorruption networks could distinguish between theprimary agents or instigators, willing participants,reluctant participants and non-participants.

9. Contra a cultural relativist viewpoint, we found thatthe villagers had similar conceptions of corruption andof what constitutes a corrupt practice to our own. TheBengali brasthachar and the more colloquially used

durniti are more or less synonymous with the Englishword corruption. Niti means the social conduct tomake a humane society or, put more simply, policy.Nitican go wrong or bad and then becomes durniti. Thisvernacular interpretation of corruption is surprisinglyclose to the current Western views found in the goodgovernance literature. We therefore share JonathanParrys belief that ordinary Indians have to some extentinternalised the universalistic and impersonal valuesassociated with modern bureaucracy (2000, p. 29).

10. For example, we were able to engage our local

landlord in Old Malda, who was a major player in thecontractor business, in a conversation on corruption at atime when he was planning to move out of this business.He was therefore willing to explain to us the corruptionnetwork with its institutionalized cuts (percentages),and vented his frustration with political leaders andbureaucrats. (He later revised his plans to changeprofession and stopped being so candid about thecorruption networks in place.)

11. Collecting sufficient quantitative data on localcorruption for detailed statistical comparisons is noto-

riously difficult (and potentially misleading, if theindicators used are decontextualized or subject to localvariation). The approach we describe hereusing a



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combination of qualitative materials, carefully triangu-latedprovides insights into the underlying processesand relationships of corruption, but leaves out questionsabout the degree to which these findings are morebroadly representative. Our confidence that they are

stems in part from the detailed discussion of our analysisof the operation of EAS in a series of workshops held inWest Bengal in December 2000 and January 2001 (fordetails see Veron, Williams, Sarkar, Srivastava, &Corbridge, 2001; Williams, Srivastava, Corbridge, &Veron, 2003). In these workshops, a range of politicians,civil servants and academics were able to comment onour methods and findings: although our methods weretreated with some skepticism by social scientistsschooled in a strong quantitative tradition, our analysiswas broadly viewed to highlight issues of accountabilityimportant across the state, and not just within thespecific field areas of our study. Generally, there are onlya very few ethnographic studies that focus on corruptionat the local level in India. The more sensational high-level corruption involving larger amounts of money ismore often the subject of academic and journalisticwritings. Exceptions are Parry (2000), Gupta (1995) andWade (1982).

12. A more radical interpretationfollowing Ferguson(1990) and Scott (1998) could view the inclusion oflocal communities in implementing and monitoringpoverty-alleviation schemes as an attempt of the state

to extend its control over them by instilling the govern-ments criteria of successful development projects andmaking communities accomplices in the states modern-ist project.

13. After the 73rd and 74th Constitutional Amend-ments that required the creation of local electedgovernments (panchayats, and their municipal counter-parts) across the whole of India, various states haveattempted to use gram sabhas or equivalent meetings asmechanisms for achieving public accountability. Forreviews of how these meetings have worked in practice,

see Alsopet al.

(2001), Deshpande and Murthy (2002),Nambiar (2001). A more radical form of social audit isthe public hearings in Rajasthan led by the NGOMazdoor Kisan Shakti Sangathan (MKSS) (see Bhatia& Dreze, 1998).

14. We defined a poverty line around a household thatdepends solely on unskilled labor, but has full employ-ment and a favorable ratio of income earners todependants. Equivalents for ownership of land andanimals, access to income from skilled jobs and under-employment were set in order to categorize the house-holds of the studied villages as either poor or non-poor.Given the low wages for unskilled labor, this povertyline is comparatively strict, and tends to fall belowIndias official consumption-based poverty line. This

narrow definition of a poverty line was used in the studyto categorize a population from which a sample could bedrawn for more in-depth research. We acknowledge, ofcourse, that income and assets are not the only impor-tant dimensions of poverty.

15. The situation was less harmonious in neighboringKeshpur block where conflicts between the CPI-M andthe Trinamool Congress caused hundreds of people tobe temporarily displaced in 2000. The violence caused 43deaths between January and October.

16. Part of the difference in visible quality of roadsbuilt under the EAS also has to be explained withgeological and climatic factors. In the alluvial delta ofOld Malda, roads are more likely to be washed awaythan on the lateritic soils in Debra.

17. Profit (rather than the Bengali labh) was used todescribe the extent of diversion of government fundsinto private pockets.

18. Only one fifth of the voters in Old Malda have everattended a gram sansad meeting. In Debra, more thanhalf of the people remembered to have attended such ameeting in the past.

19. We elaborated elsewhere (Veron et al., 2003) on thepolitics in Malda district that is conducted with little

sustained reference to development.

20. Interview, October 29, 1999.

21. Interview, November 23, 1999.

22. At higher levels of governance in Malda, tradi-tional social and economic elites were more prevalent,particularly in the Indian National Congress, which isstrong here compared with other areas in West Bengal.The longstanding Member of (the national) Parliamentfrom Malda, Abi Ghan Choudhuri from the Congressparty, is the son of the biggest landowning, and formerzamindar, family of the area. A descendant from a minorzamindar family was the Member of (the state)Legislative Assembly from the urban area of Malda.The partial decline of the Congress at the expense of theBJP and TC, whose leaders come from a new andgrowing economic elite of businesspeople and profes-sionals, is a further indication that traditional elites arelosing political power. There are a few surviving leadersof the anti-colonial struggle in the communist parties ofthe district. However, their role in the district leadershiphas become representational at best. One well respectedveteran and member of the CPI(M), for example, is

shown around during visits of party uppers fromKolkata, but he spends his everyday life working in agarage.



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23. When politics occasionally was put before individ-ual rent-seeking, it could take violent, even criminalforms. During the severe floods of 1998, for example, adam badly needed repair to protect a huge settlement.But politicians forced the appointed contractor to

further damage the dam with the objective of harmingthe nearby village, which is an INC stronghold. In thisway, the CPM leaders hoped to demonstrate thepowerlessness of the political opposition.

24. Group interviews, November 11, 1999.

25. We have described the CPI-Ms methods toensure flow of information from below in a hierar-chical party organization elsewhere (Williams, Veron,et al., 2003).

26. Such party donations by contractors are not theonly source of income for political parties in India that isneeded to pay the high election expenses. Parties raisemoney in a market for public office in which bureau-crats, for example, pay bribes to politicians for transfers

into (or avoidance of) particular posts (see also Wade,1982).

27. It was beyond the scope of the research to study theparty-political or administrative diversion of develop-ment funds at the state and national levels.

28. Interview, September 1, 1999.

29. We were not able to determine whether profitswere systemically built in to project estimates byinflating material and labor costs.

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