Monitoring Corruption: Can Top-Down Monitoring Crowd Out Grassroots Participation?

Empirical evidence on the effectiveness of grassroots monitoring is mixed. This paper proposes a previously unexplored mechanism that may explain this result. We argue that the presence of effective top-down monitoring alternatives can undermine citizen participation in the monitoring process. Using Olken's (2009) road-building field experiment, we find that the effect of grassroots monitoring on missing expenditures drops by more than 90% in villages where a government audit is also implemented. We find evidence of crowding-out effects: in audit villages, individuals are less likely to attend, talk at, and actively participate in accountability meetings.