DOI: 10.1257/rct.5-5.0
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Kelly Zhang

Abstract: Mismanagement of public spending is a salient issue in many developing countries (World Bank Development Report, 2004). In a study across sub-Saharan African countries, up to 80% of public funding did not reach beneficiaries (Reinikka and Svensson, 2004). 1 Generally, waste in public spending can be especially costly to the beneficiaries, who rely on the public sector for basic services such as health, water, education, and infrastructure. Bandiera et al. (2009) distinguish passive waste from active waste-the …

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