The Paradox of Decentralization: Impact on Corruption in Water Utilities

This study examines the impact of decentralisation on corruption levels in water utilities across central India, challenging the widely held assumption that decentralisation reduces corruption. Using experience-based measures and a natural experiment approach, the research compares corruption levels between centralised and decentralised water supply agencies Madhya Pradesh and Chhattisgarh. The study employs a longitudinal survey conducted from over five years, focusing on bribery in various aspects of water service provision. Results indicate that decentralised agencies exhibit significantly higher levels of corruption compared to centralised ones, particularly in the initial stages of decentralisation. While a gradual reduction in corruption is observed over time, the difference between decentralised and centralised utilities remains significant in the medium term. These findings contradict the simplistic view of decentralisation as a cure-all for governance issues and highlight the need for a more nuanced understanding of its effects on public service provision. The study contributes to the ongoing debate on decentralisation policies and their implications for corruption in developing countries, offering valuable insights for managers