Weber's organization of the public administration relies on a clearly defined hierarchical structure with a system of subordination and supervision, a division of labor and specified positions with assigned responsibilities.
Furthermore, the internal promotion and career stability of merit-recruited civil servants create a sense of shared commitment to the 'vocation' of office-holding that establishes 'esprit de corps', making it harder for corruption to occur.
During the 1980s, developing countries subject to structural adjustment programs (SAPs) experienced fiscal austerity notably manifested through pressures to reduce the public wage bill.
Public officials may ask for compensation through informal or illegal means and these coping strategies compromise the efficiency and honesty of civil service organizations.
Given these arguments, increasing public officials' wages and other employment benefits has been an important aspect of the civil service reform agenda in developing countries.
[17] Poor public finance performance and strong budgetary pressures due to corruption may in turn sustain low civil service salaries.
These experimental results substantiate Van Rijckeghem and Weder's findings and cast doubt on the cost-effectiveness of increasing public salaries to combat corruption.
Di Tella and Schargrodsky provide additional evidence with their micro-empirical analysis on wages and auditing during a crackdown on corruption in Buenos Aires, Argentina, in 1996–97.
Decentralization might therefore lead to a lack of coordination among bribe-seeking bureaucrats and a "Tragedy of the Commons" outcome where public officials ask bribe payments that are too high, thereby increasing the burden that corruption imposes on firms and citizens.
[34] Diaby and Sylwester empirically test these hypotheses in a cross-country regression and find that bribe payments are higher under a more decentralized bureaucratic structure.
[35] Yet Fisman and Gatti detect a strong negative correlation between fiscal decentralization (as measured by subnational share of total government spending) and corruption.
The inherent conflict of interest as well as the lack of oversight require independent third parties to certify the reliability of financial reporting, performance results and compliance to rules.
Based on suspicious circumstances, auditors can identify illegal behaviour and collect evidence on misdeeds which can subsequently be used to prosecute public servants at fault.
[38] While Justice Plana's campaign was a multi-faceted approach, the higher monitoring intensity combined with a highly credible threat of punishment were particularly successful in deterring corrupt behaviour in the Bureau of Internal Revenue.
[42] The crackdown on corruption in the tax agency involved coercion such as the use of extra-legal surveillance systems to ensure public officials' observance of the new procedural codes.
An alternative approach to improving governance and combating corruption that has gained prominence in recent years is encouraging grassroots participation by community members in local monitoring to induce bottom-up pressures for reform.
Community participation is now considered an important component of reforms aiming to improve public service delivery and corruption at the local level.
J. Stiglitz argues that community members, as beneficiaries of public goods and services, will have more incentives to monitor and ensure that governments programs are successful compared to indifferent central bureaucrats.
[47] A bottom-up project, the Citizen Report Card (CRC), pioneered by the NGO Public Affairs Center (PAC) was implemented in 1993 in Bangalore, India.
[50] For instance, 27,000 new public housing units were created in 1989 (compared to only 1,700 in 1986), the number of schools quadrupled between 1986 and 1997 while the share of Porto Alegre's budget going to education and health went from 13% in 1985 to about 40% in 1996.
[51] Participatory budgeting still has to address some limitations, including lack of representation of the poorest, but its success has led other municipalities in Brazil and public entities in other countries to adopt this initiative.
Foltz and Opoku-Agyemang assess the impact of this salary reform using a difference-in-difference analysis taking advantage of the exogenous change induced by the policy.
If assuming group differences would have stayed constant in the absence of the reform (parallel trend assumption), the difference-in-difference coefficient estimate measures the causal impact of the salary increase on Ghanaian police officers' propensity to ask for bribes.
[53] Khan, Khwaja and Olken implemented a large-scale randomized experiment in Punjab, Pakistan to assess the impact of performance-based payment schemes for tax collectors.
However, Khan, Khwaja and Olken point out that the benefits of pay-for-performance contracts outweigh their costs and suggest they can effective in increasing tax revenue collection.
Olken also designed experiments to increase local members' participation in 'accountability meetings' where officials in charge of the road-building project expose how the budget will be spent.
North et al. argue that some developing countries function as 'limited access orders' in which elites exclude broad cross-sections of society to maintain an equilibrium that enables them to extracts rents.
[56] In such an equilibrium, political elites have no incentives to break down their patronage networks and introduce meritocratic recruitment reforms in the civil service as it would threaten their position and reduce their opportunities for rent-seeking.
In a background paper for the 2011 World Bank Development Report,[58] de Weijer and Pritchett appraise that it would take about 20 years to witness improvements in the functional capability of the state.
[60] Most approaches to civil service reform rely on principal-agent frameworks that assume that 'principled principals' are public-spirited and will always take on the task to fight corruption and improve bureaucratic performance.